The effective income tax rate in the fourth quarter of fiscal 2013 was 34.9% as compared to 36.0% in the fourth quarter of fiscal 2012. The decrease in the effective tax rate in the fourth quarter of fiscal 2013, as compared to the fourth quarter of fiscal 2012, was due primarily to a decrease in the reserve for state taxes partially offset by increases in U.S. tax of foreign operations and the reserves for uncertain tax positions.
Net income in the fourth quarter of fiscal 2013 increased 26.3% to $102.2 million compared with $80.9 million in the fourth quarter of fiscal 2012. Adjusted net income for the fourth quarter of fiscal 2013 increased 12.5% to $99.0 million as compared to adjusted net income of $88.1 million in the fourth quarter of fiscal 2012, excluding the favorable $5.0 million accounting adjustment in the fourth quarter of fiscal 2013 and the litigation charge of $11.5 million in the fourth quarter of fiscal 2012.
Fiscal 2013 Results
Total net sales for fiscal 2013 increased 11.4% to $10.4 billion compared with total net sales of $9.3 billion in fiscal 2012. Consistent with the National Retail Federation Calendar, the Company’s fiscal 2013 included 53 weeks as compared to 52 weeks in fiscal 2012. The Company estimates this extra week contributed approximately $189 million in sales. Comparable store sales increased 3.0%. This increase was a result of increased customer traffic and an increase in the average customer transaction value. Sales were strongest in the Consumables category, which increased 16.9% during the year, driven primarily by strong growth in food, health and beauty aids, and tobacco.Gross profit in fiscal 2013 increased 9.0% to $3.6 billion, or 34.2% of net sales, compared with $3.3 billion, or 34.9% of net sales, in fiscal 2012. Included in gross profit for fiscal 2013 was a one-time $5.0 million favorable adjustment related to a change in accounting for certain vendor allowances. Excluding this adjustment, gross profit for fiscal 2013 increased 8.9% to $3.5 billion, or 34.2% of net sales. As a percentage of net sales, the impact of stronger sales of lower-margin consumables, increased inventory shrinkage and higher markdowns were partially offset by higher markups and lower freight expense.
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