The guidance contemplates some of the impact from the weakening Japanese Yen. The average rate in fiscal year 2012 for the Japanese Yen was about 80. Current spot rate of the Japanese Yen has weakened by about 15 percent, which means the company’s Japanese Yen-based net sales and earnings translate to fewer U.S. dollars.
Further, the company noted that the 53 rd week in fiscal year 2012 creates a timing shift in the calendar for fiscal year 2013. For example, the first quarter of fiscal year 2013 begins on February 3, 2013 and ends on May 4, 2013. In fiscal year 2012, the first quarter began a week earlier on January 29, 2012, and ended on April 28, 2012. Therefore, the first quarter of fiscal year 2013 excludes January 29 through February 2 and now includes April 29 through May 4, a week that was part of the second quarter last year.
Depreciation and Amortization
Fiscal year 2012 depreciation and amortization expense, net of amortization of lease incentives, was $483 million.For fiscal year 2013, the company expects depreciation and amortization expense, net of amortization of lease incentives, to be about $475 million. Operating Expenses Fourth quarter operating expenses were $1.2 billion, up $141 million compared with last year. Full year operating expenses were $4.2 billion, up $393 million from the prior year. Marketing expenses for the full year were $653 million, up $105 million compared with last year. Operating Margin The company’s operating margin in fiscal year 2012 was 12.4 percent. The company expects that operating margin for fiscal year 2013 will be about 13 percent. Effective Tax Rate The effective tax rate was 39.9 percent for the fourth quarter of fiscal year 2012. The effective tax rate for fiscal year 2012 was 39.0 percent. For fiscal year 2013, the company expects the effective tax rate to be about 39 percent.
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