Gross profit in the fourth quarter of fiscal 2013 increased 8.6% to $868.4 million, or 34.7% of net sales, compared with $799.7 million, or 33.8% of net sales, in the fourth quarter of fiscal 2012. Included in gross profit for the fourth quarter of 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 the fourth quarter of fiscal 2013 increased 8.0% to $863.5 million, or 34.5%. As a percentage of net sales, higher markups and lower freight expense were partially offset by the impact of stronger sales of lower-margin consumables, higher markdowns and increased inventory shrinkage.

Selling, general and administrative (SG&A) expenses in the fourth quarter of fiscal 2013 increased 7.6% to $712.9 million as compared to $662.6 million in the fourth quarter of fiscal 2012. SG&A expense was approximately flat on an average per-square-foot basis. As a percentage of net sales, SG&A expenses were 28.5% in the fourth quarter of fiscal 2013 compared with 28.0% in the fourth quarter of fiscal 2012. The expense de-leverage during the quarter was primarily driven by the flat comparable store sales. As a percentage of net sales, higher store occupancy costs and store payroll were partially offset by lower advertising and insurance costs.

Operating profit in the fourth quarter of fiscal 2013 increased 23.9% to $155.6 million, or 6.2% of net sales, compared with $125.6 million, or 5.3% of net sales, in the fourth quarter of fiscal 2012. Adjusted operating profit in the fourth quarter of 2013 was $150.6 million compared with adjusted operating profit of $137.1 million in 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. As a percentage of net sales, adjusted operating profit was 6.0% in the fourth quarter of fiscal 2013 as compared to adjusted operating profit of 5.8% in the fourth quarter of fiscal 2012.

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