Dillard's 2012 Annual Report Download - page 25

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Key Performance Indicators
We use a number of key indicators of financial condition and operating performance to evaluate
the performance of our business, including the following:
Fiscal Fiscal Fiscal
2012 2011 2010
Net sales (in millions) .................... $6,593.2 $6,263.6 $6,121.0
Gross profit (in millions) .................. $2,346.1 $2,216.3 $2,140.1
Gross profit as a percentage of net sales ...... 35.6% 35.4% 35.0%
Retail gross profit as a percentage of net sales . . 36.1% 35.8% 35.5%
Selling, general and administrative expenses as a 25.4% 26.0% 26.6%
percentage of net sales ..................
Cash flow from operations (in millions) ....... $ 522.7 $ 501.1 $ 512.9
Total retail store count at end of period ....... 302 304 308
Retail sales per square foot ................ $ 129 $ 121 $ 116
Retail stores sales trend ................... 3%** 3% 2%
Comparable retail store sales trend .......... 4%** 4% 3%
Comparable retail store inventory trend ....... (1)% 3% (2)%
Retail merchandise inventory turnover ........ 2.9 2.8 2.8
** Based upon the 52 weeks ended February 2, 2013 and 52 weeks ended February 4, 2012
Trends and Uncertainties
Fluctuations in the following key trends and uncertainties may have a material effect on our
operating results.
• Cash flow—Cash from operating activities is a primary source of liquidity that is adversely
affected when the industry faces economic challenges. Furthermore, operating cash flow can be
negatively affected when new and existing competitors seek areas of growth to expand their
businesses.
• Pricing—If our customers do not purchase our merchandise offerings in sufficient quantities, we
respond by taking markdowns. If we have to reduce our retail selling prices, the cost of sales on
our consolidated statement of income will correspondingly rise, thus reducing our income and
cash flow.
• Success of brand—The success of our exclusive brand merchandise as well as merchandise we
source from national vendors is dependent upon customer fashion preferences and how well we
can predict and anticipate trends.
• Sourcing—Our store merchandise selection is dependent upon our ability to acquire appealing
products from a number of sources. Our ability to attract and retain compelling vendors as well
as in-house design talent, the adequacy and stable availability of materials and production
facilities from which we source our merchandise and the speed at which we can respond to
customer trends and preferences all have a significant impact on our merchandise mix and, thus,
our ability to sell merchandise at profitable prices.
• Store growth—Our ability to open new stores is dependent upon a number of factors, such as
the identification of suitable markets and locations and the availability of shopping
developments, especially in a weak economic environment. Store growth can be further hindered
by mall attrition and subsequent closure of underperforming properties.
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