Neiman Marcus 2008 Annual Report Download - page 35

Table of Contents
(2) For fiscal year 2008, other income includes a pension curtailment gain of $32.5 million as a result of our decision to freeze
certain Pension and SERP benefits as of December 31, 2007.
For fiscal year 2007, other income includes 1) $4.2 million of other income we received in connection with the merger of
Wedding Channel.com, in which we held a minority interest, and The Knot and 2) $6.0M of other income related to aged, non-
escheatable gift cards.
(3) Comparable revenues include 1) revenues derived from our retail stores open for more than fifty two weeks, including stores
that have been relocated or expanded and 2) revenues from our Direct Marketing operation. Comparable revenues exclude 1) revenues
of closed stores and 2) revenues from our discontinued operation (Kate Spade LLC sold in December 2006). The calculation of the
change in comparable revenues for fiscal year 2008 is based on revenues for the fifty two weeks ended July 26, 2008 compared to
revenues for the fifty two weeks ended July 28, 2007.
(4) Sales per square foot for fiscal year 2008 is based on revenues for the fifty two weeks ended July 26, 2008.
(5) For an explanation of EBITDA and Adjusted EBITDA as measures of our operating performance, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measure-EBITDA and Adjusted
EBITDA."
Fiscal Year Ended August 1, 2009 Compared to Fiscal Year Ended August 2, 2008
Revenues. Our revenues for fiscal year 2009 of $3,643.3 million decreased $957.2 million, or 20.8%, from $4,600.5 million
in fiscal year 2008. The decrease in revenues was due to decreases in comparable revenues for both our Specialty Retail stores and
Direct Marketing operation as a result of the current challenging economic environment and lower customer demand. Customer
demand, especially during the holiday selling season, was well below our initial expectations and the prior year and the lower level of
customer demand continued throughout the Spring season of fiscal year 2009.
Comparable revenues for the fifty two weeks ended August 1, 2009 were $3,575.4 million compared to $4,548.5 million in
fiscal year 2008, representing a decrease of 21.4%. Comparable revenues decreased in fiscal year 2009 by 23.2% for Specialty Retail
stores and 12.2% for Direct Marketing. New stores generated revenues of $67.9 million in fiscal year 2009.
Comparable revenues by quarter for fiscal years 2009 and 2008 are as follows:
Fiscal year 2009 Fiscal year 2008
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Specialty Retail
stores (25.0)% (27.1)% (25.0)% (15.8)% (1.8)% (3.4)% 3.4% 6.4%
Direct Marketing (15.7)% (14.3)% (12.1)% (7.0)% 0.7% 2.0% 5.2% 7.1%
Total (23.4)% (25.1)% (22.8)% (14.5)% (1.4)% (2.5)% 3.7% 6.5%
Internet revenues generated by Direct Marketing were $518.5 million for fiscal year 2009, a decrease of 8.2% compared to
the prior fiscal year. In addition, catalog revenues decreased 27.0% compared to the prior fiscal year.
Cost of goods sold including buying and occupancy costs (excluding depreciation). COGS for fiscal year 2009 were 69.6%
of revenues compared to 63.8% of revenues for fiscal year 2008.
The increase in COGS as a percentage of revenues in fiscal year 2009 was primarily due to decreased product margins
generated by both our Specialty Retail stores and Direct Marketing operation of approximately 4.6% of revenues. We experienced a
lower than anticipated level of customer demand in fiscal year 2009. As a result, we generated a lower level of full-price sales and
incurred significantly higher net markdowns and sales promotions costs to liquidate inventories held in excess of customer demand,
resulting in lower product margins. Additionally, buying and occupancy costs increased by 1.2% of revenues primarily due to the
deleveraging of payroll and rent expenses on the lower level of revenues generated, net of savings realized as a result of our initiatives
to control our expenses (approximately $10 million).
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