Bottom line profit increased to $156.5 million for the year ended July 25 2009, up from $147.3 million in the previous year.
David Jones chief executive Mark McInnes said sales in the first eight weeks of fiscal 2010 had been better than expected.
"This is a good sign as we begin to cycle the worst of last year's downturn and head into the all-important Christmas trading quarter."
While sales revenue for fiscal 2009 was down 5.4 per cent to $1.99 billion, new store openings and major rebuilds are expected to deliver a 15 to 25 per cent sales growth over the medium term.
The company is currently in active negotiations to open four stores in high value locations across Australia. The redevelopment of its flagship Bourke Street store in Melbourne - which will increase selling space by 30 per cent - and the rebuilding of its Claremont Store - which will double in size - were cited as key sales generators.
McInnes said a further three to five stores in key suburban sites will be refurbished over the next 12 to 36 months.
"Our new store, rebuild and refurbishment strategy will deliver strong growth in our core business and has the added benefit of being low risk as it is fully funded and relates to attractive demographic areas where our brand is best suited."
David Jones has reduced its net debt by $471 million to less $100 million, an 84 per cent reduction since fiscal 2007. It also reacquired its flagship Sydney and Melbourne CBD stores in September 2006, a $30 million a year saving that will grow to an estimated $61 million per annum in 20 years.