Saks Fifth Avenue 2009 Annual Report Download - page 28

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Table of Contents
rate was principally due to fewer markdowns in the fourth quarter of 2009 compared to the aggressive markdowns taken in the fourth quarter of 2008 when the
Company initiated promotional activities in an effort to stimulate consumer demand and reduce inventory levels. In addition, the Company achieved SG&A
expense leverage of 20 basis points in 2009 despite a year-over-year sales decrease of $411.9 million.
NET SALES
For the year ended January 30, 2010, total sales decreased 13.5% to $2,631.5 million from $3,043.4 million for the year ended January 31, 2009.
Consolidated comparable store sales decreased $440.6 million, or 14.7% from $2,987.3 million for the year ended January 31, 2009 to $2,546.7 million for the
year ended January 30, 2010.
Comparable store sales are calculated on a rolling 13-month basis. Thus, to be included in the comparison, a store must be open for 13 months. The
additional month is used to transition the first month impact of a new store opening. Correspondingly, closed stores are removed from the comparable store sales
comparison when they begin liquidating merchandise. Expanded, remodeled, converted, and re-branded stores are included in the comparable store sales
comparison, except for the periods in which they are closed for remodeling and renovation.
GROSS MARGIN
For the year ended January 30, 2010, gross margin was $963.4 million, or 36.6% of net sales, compared to $980.9 million, or 32.2% of net sales, for the
year ended January 31, 2009. The increase in gross margin dollars and gross margin rate was primarily the result of controlled inventory levels and a more
disciplined promotional and clearance cadence during the current year. In 2008, gross margin was negatively impacted by aggressive markdowns as the
Company reacted to the rapidly deteriorating economic conditions and worked to clear excess inventory.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
For the year ended January 30, 2010, SG&A was $674.3 million, or 25.6% of net sales, compared to $784.5 million, or 25.8% of net sales, for the year
ended January 31, 2009. The decrease of $110.2 million in expenses was primarily driven by lower variable expenses associated with the year-over-year sales
decrease of $411.9 million, as well as other cost savings initiatives implemented by the Company. As a percentage of sales, SG&A decreased by 20 basis points
over the prior year.
Amounts received from vendors in conjunction with compensation programs and cooperative advertising were consistent with the related gross
compensation and cooperative advertising expenditures and therefore had no significant impact on SG&A expense, in dollars or as a percentage of net sales.
OTHER OPERATING EXPENSES
For the year ended January 30, 2010, other operating expenses were $314.3 million, or 12% of net sales, compared to $320.7 million, or 10.5% of net
sales, for the year ended January 31, 2009. The decrease of $6.4 million was principally driven by a decrease in taxes other than income taxes of $7.3 million due
to a decrease in payroll taxes primarily related to the Company’s reduction in force in January 2009 and a decrease in store pre-opening costs of $0.3 million.
These decreases were partially offset by higher depreciation and amortization expense of $0.5 million and higher property and equipment rentals of $0.7 million.
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Source: SAKS INC, 10-K, March 18, 2010 Powered by Morningstar® Document Research℠