Gross profit for the year was flat at $1.17 billion, or 39.5% as a rate to sales this year, compared to 39.9% last year. As a rate to sales, buying, occupancy and warehousing costs increased 50 basis points and was due primarily to new store openings and the deleveraging of rent on negative comparable store sales for the year. This was offset by a 10 basis point increase in merchandise margin.
Selling, general and administrative expense decreased $12 million to $713 million this year, compared to $725 million last year. The $713 million of SG&A this year included $10 million of severance and related charges. As noted in the fourth quarter discussion, the decrease in SG&A was due to lower incentive compensation expense recorded in the year, as well as savings resulting from the company's corporate profit initiative.
Operating income for the year increased 2% to $317 million, compared to $310 million last year. The operating margin expanded 10 basis points to 10.7% from 10.6% last year.
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American Eagle Outfitters Inc
marketing@alchempro.com
