Express 2014 Annual Report Download - page 34

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Fiscal Year Comparisons
Net Sales
Year Ended
2014 2013 2012
Net sales (in thousands) .................... $2,165,481 $2,219,125 $2,157,227
Comparable sales ......................... (5)% 3% — %
Comparable sales (excluding e-commerce
sales) ................................ (7)% (1)% (3)%
Gross square footage at end of period (in
thousands) ............................ 5,619 5,498 5,423
Number of:
Stores open at beginning of period ....... 632 625 609
New retail stores ..................... 9 16 28
New outlet stores ..................... 41 — —
Retail stores converted to outlets ........ (22) — —
Closed stores ........................ (19) (9) (12)
Stores open at end of period ............ 641 632 625
Net sales decreased by approximately $53.6 million, or 2%, between 2014 and 2013. Comparable sales decreased
5% in 2014 compared to 2013. The decrease in comparable sales resulted from decreased transactions and
average dollar sales in our retail stores offset by growth in e-commerce sales. We attribute the decrease in
average dollar sales to a highly promotional retail landscape, as a result of continued decreased traffic. Non-
comparable sales increased $60.3 million, primarily due to the opening of the the 41 new outlet stores.
Net sales increased by approximately $61.9 million to $2.2 billion in 2013, a 3% increase. Included in 2012 net
sales was approximately $27.0 million related to the fifty-third week. Comparable sales increased 3% for 2013
compared to 2012. The increase in comparable sales resulted from growth in e-commerce sales and an increase in
store transactions partially offset by decreases in average dollar sales. We attribute the decrease in average dollar
sales to a highly promotional retail landscape, as a result of continued decreased traffic. Non-comparable sales
decreased $0.9 million, equally driven by fewer new store openings and remodels.
Gross Profit
The following table shows cost of goods sold, buying and occupancy costs, and gross profit in dollars for the
stated periods:
Year Ended
2014 2013 2012
(in thousands, except percentages)
Cost of goods sold, buying and occupancy
costs ................................. $1,504,527 $1,501,418 $1,414,588
Gross profit ............................. $ 660,954 $ 717,707 $ 742,639
Gross margin percentage ................... 30.5% 32.3% 34.4%
The 180 basis point decrease in gross margin, or gross profit as a percentage of net sales, in 2014 compared to 2013
was comprised of a 180 basis point increase in buying and occupancy costs as merchandise margin remained flat.
The increase in buying and occupancy costs was primarily the result of increased depreciation expense, increased
rent and related charges, and an increase in base payroll expense primarily due to additional headcount at our home
office to support our outlet initiative. Depreciation expense was impacted by the opening of our two flagship stores
in New York City and San Francisco as well as impairment charges of $10.5 million related to leasehold
improvements at certain under-performing stores. Assets are reviewed for impairment whenever events or changes
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