Sales for the year ended December 31, 2012 increased by $38.6 million or 6.5% to $630.1 million (2011 - $591.5 million). The increase is primarily the result of new store expansion, same-store sales growth in both Canada and the U.S., and a $1.1 million increase in the Canadian currency equivalent for US sales as a result of foreign exchange rate differences.
-- Canadian same-store sales increased by $12.8 million or 3.0%. -- The increases in same-store sales were primarily realized during the first three quarters of 2012. Management attributes these increases primarily to the continued success of the Company's expanded store hours program (with stores in selected markets open until 2 am) and continued management focus on the execution of operational initiatives related to merchandising techniques, category management and purchasing strategies.-- US same store sales increased by $1.5 million or 1.1%. -- Both regions in the US had positive results during 2012, which Management believes were attributable primarily to continued focus on the execution of operational initiatives related to merchandising techniques, category management, purchasing strategies and the enhanced customer experience at the Alaska stores arising as a result of store renovations. -- However same-store sales in the United States have continued to be negatively impacted by certain counties in Kentucky going from 'dry' to 'wet' throughout 2012 (i.e. certain counties in close proximity to the Company's stores that did not previously permit retail package liquor sales are now permitting these sales). To a lesser extent, US same-store sales were also negatively impacted by unfavourable weather conditions in Kentucky during the months of September and November 2012.
-- Sales for the other Canadian and US stores (new stores added after December 31, 2010) were $25.1 million for the three months ended December 31, 2012 (2011: $2.4 million) as a result of the ten (10) new stores opened in 2012, including the two Wine and Beyond stores opened in Canada during the last week of September 2012, and the five stores that were opened in the fourth quarter of 2011. Sales for these new stores in 2012 exceeded expectations.
For the three months ended December 31, 2012, gross margin was $45.5 million, up 8.8% from $41.8 million for the same period last year. Gross margin as a percentage of sales increased to 25.4% from 24.9% in 2011. The 'quarter over quarter' increase in gross margin percentage represents the fifth consecutive quarterly increase. For the year ended December 31, 2012, gross margin was $159.5 million, up 8.9% from $146.5 million for the same period last year. Gross margin as a percentage of sales increased to 25.3% from 24.8% in 2011. Gross margin as a percentage of sales has increased primarily as a result of continued focus on merchandising techniques, category management and purchasing strategies, including expanding our selection and marketing of control brands/private label and exclusive products.
Adjusted operating margin for the three months ended December 31, 2012 was $14.4 million, a decrease of 8.3% from $15.7 million in 2011. As a percentage of total sales, adjusted operating margin for the fourth quarter 2012 was 8.0%, down from 9.3%. Adjusted operating margin for the year ended December 31, 2012 was $49.2 million, up 4.9% from $46.9 million in 2011. As a percentage of total sales, adjusted operating margin for the year ended December 31, 2012 was 7.8%, down from 7.9% a year earlier primarily due to the additional expenditures for the new stores opened during the year. The decrease in adjusted operating margin as a percentage of sales for the three months and the year ended December 31, 2012 was primarily due to the following matters that arose in the fourth quarter of 2012: a decline in US same-store sales and the relatively flat increase in Canadian same-store sales, inflation of operating expenses, investments being made to the Company's information technology infrastructure and head office staffing complement to support the Company's growth strategy, and pre-opening costs associated with new stores.