Dillard's 2013 Annual Report Download - page 24

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18
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 2013 Fiscal 2012 Fiscal 2011
Net sales (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,531.6 $ 6,593.2 $ 6,263.6
Gross profit (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,307.9 $ 2,346.1 $ 2,216.3
Gross profit as a percentage of net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.3% 35.6 % 35.4%
Retail gross profit as a percentage of net sales . . . . . . . . . . . . . . . . . . . . . . . 35.7% 36.1 % 35.8%
Selling, general and administrative expenses as a percentage of net sales . . 25.0% 25.4 % 26.0%
Cash flow from operations (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 501.8 $ 522.7 $ 501.1
Total retail store count at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 302 304
Retail sales per square foot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 130 $ 129 $ 121
Retail stores sales trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1% (1) 3 % (2) 3%
Comparable retail store sales trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1% (1) 4 % (2) 4%
Comparable retail store inventory trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5% (1)% 3%
Retail merchandise inventory turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 2.9 2.8
___________________________________
(1) Based upon the 52 weeks ended February 1, 2014 and 52 weeks ended February 2, 2013
(2) 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.
Seasonality and Inflation
Our business, like many other retailers, is subject to seasonal influences, with a significant portion of sales and income
typically realized during the last quarter of our fiscal year due to the holiday season. Because of the seasonality of our business,
results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.
We do not believe that inflation has had a material effect on our results during the periods presented; however, our
business could be affected by such in the future.