President and Chief Executive Officer Jane Elfers commented, "We continued to make significant progress during 2012 and had a strong finish to the year. We delivered record sales of $1.8 billion in fiscal 2012 and a 2% increase in comparable retail sales. Non-GAAP earnings per share increased 11% to $3.23. In addition, we generated $205 million in cash from operations during the year and returned approximately $89 million to shareholders through our share buyback program.
"For the fourth quarter, comparable retail sales increased 4.3%, non-GAAP operating income increased 65% and non-GAAP earnings increased 32% to $1.15 per diluted share," Ms. Elfers said.
Net Income and EPS
The Company announced on February 26, 2013 that it was changing its accounting policy to report its inventory on the cost method instead of the retail inventory method and that it will capitalize additional supply chain costs instead of reporting them as period expenses, effective in the fourth quarter. The Company is reporting fourth quarter and fiscal 2012 results under both the new and previous accounting policies to facilitate comparisons between the two accounting methods.
The term (i) "cost method" reflects the change in accounting principle to report inventory on the cost method and the capitalization of additional supply chain costs, (ii) "adjusted" refers to results in prior periods which have been adjusted to reflect the GAAP cost method, and (iii) "Non-GAAP" refers to results which exclude transactions which the Company believes are not indicative of the performance of its core business. The Company believes that by providing this supplemental disclosure to investors it will facilitate comparisons of its past and present performance. A reconciliation of net income and earnings per diluted share as reported is included in this press release in Table 3.
Under the cost method, the Company reported net income of $19.1 million and earnings per diluted share of $0.80 for the fourteen weeks ended February 2, 2013, compared to adjusted net income of $23.3 million and adjusted earnings per diluted share of $0.93 for the thirteen weeks ended January 28, 2012. For the fifty-three weeks ended February 2, 2013, the Company reported net income of $63.2 million and earnings per diluted share of $2.61, compared to adjusted net income of $74.3 million and adjusted earnings per diluted share of $2.90 for the 52-week period ended January 28, 2012.
Under the retail method, the Company reported net income of $22.1 million and earnings per diluted share of $0.93 for the fourteen weeks ended February 2, 2013, compared to net income of $24.2 million and earnings per diluted share of $0.97 in the thirteen weeks ended January 28, 2012. For the fifty-three weeks ended February 2, 2013, the Company reported net income of $62.7 million and earnings per diluted share of $2.58, compared to net income of $77.2 million and earnings per diluted share of $3.01 for the fifty-two weeks ended January 28, 2012.
The results reported above include transactions that the Company believes are not indicative of the performance of its core business. The following table also shows Non-GAAP earnings per diluted share under the retail method excluding such transactions for the fiscal quarters and fiscal years ended February 2, 2013 and January 28, 2012.
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