Saks Fifth Avenue 2010 Annual Report Download - page 23

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RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected items from the Company’s Consolidated
Statements of Income, expressed as percentages of net sales (numbers may not total due to rounding):
Year Ended
January 29,
2011
January 30,
2010
January 31,
2009
Net sales ..................................................... 100% 100% 100%
Cost of sales (excluding depreciation and amortization) ................ 59.9 63.4 67.8
Gross margin .............................................. 40.1 36.6 32.2
Selling, general and administrative expenses ......................... 25.7 25.6 25.8
Other operating expenses ........................................ 10.7 12.0 10.5
Impairments and dispositions ..................................... 0.5 1.1 0.4
Operating income (loss) ..................................... 3.2 (2.1) (4.4)
Interest expense ............................................... (2.0) (1.9) (1.5)
Gain (loss) on extinguishment of debt .............................. (0.0) 0.0 0.0
Other income, net .............................................. 0.0 0.0 0.2
Income (loss) from continuing operations before income taxes ....... 1.2 (3.9) (5.8)
Provision (benefit) for income taxes ............................... (0.5) (1.7) (1.6)
Income (loss) from continuing operations ....................... 1.7 (2.2) (4.2)
Discontinued operations:
Loss from discontinued operations ................................. 0.0 (0.0) (1.7)
Provision (benefit) for income taxes ............................... 0.0 (0.0) (0.7)
Loss from discontinued operations ............................. 0.0 (0.0) (1.1)
Net income (loss) .............................................. 1.7% (2.2)% (5.2)%
FISCAL YEAR ENDED JANUARY 29, 2011 COMPARED TO FISCAL YEAR ENDED JANUARY 30, 2010
DISCUSSION OF OPERATING INCOME (LOSS)—CONTINUING OPERATIONS
The following table shows the changes in operating income (loss) from 2009 to 2010:
(In Millions)
Total
Company
2009 Operating Loss—Continuing Operations ........................................... $(54.5)
Store sales and margin ................................................................ 153.8
Operating expenses .................................................................. (25.5)
Impairments and dispositions .......................................................... 16.3
Change ........................................................................ 144.6
2010 Operating Income—Continuing Operations ........................................ $ 90.1
For the year ended January 29, 2011, the Company’s operating income totaled $90.1 million, a 530 basis
point improvement as a percentage of net sales, from the operating loss of $54.5 million in the same period last
year. The current year operating income was driven by a 6.4% increase in comparable store sales as well as a
gross margin rate increase of 350 basis points for the year ended January 29, 2011. The year-over-year increase
in the gross margin rate was principally due to increased full-price selling and a reduced level of promotional
activity.
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