Fourth quarter same-store sales increased 6.9 percent compared with the same period in fiscal 2008. Net sales in the fourth quarter were $2.54 billion, an increase of 10.3 percent compared with net sales of $2.30 billion during the same period in fiscal 2008.

FOURTH QUARTER SUMMARY

Nordstrom's fourth quarter performance reflected a continuation of the discipline and execution the company demonstrated throughout the year. The breadth and quality of its merchandise offering, combined with a steady flow of fashion into the stores, led to same-store sales increases in each month of the quarter.

• Full-line same-store sales in the fourth quarter increased 3.9 percent and sales for Nordstrom Direct increased 32.1 percent, combining for a multi-channel same-store sales increase of 7.1 percent compared with the same period in fiscal 2008. Most of the company's merchandise categories generated positive same-store sales during the quarter. Highlights for multi-channel sales performance included Women's Better Apparel, Women's Shoes and Jewelry. The Midwest, South, and Northwest regions were the top-performing geographic areas for full-line stores relative to the fourth quarter of 2008.
• Nordstrom Rack experienced its fourth consecutive quarter of positive performance with a same-store sales increase of 4.6 percent in the fourth quarter compared with the same period in fiscal 2008. During the fourth quarter, the company opened two Nordstrom Rack stores.
• Gross profit, as a percentage of net sales, increased approximately 530 basis points compared with last year's fourth quarter. The improvement was mainly driven by merchandise margin as a percentage of net sales. Additionally, the increase in sales allowed for some leverage in buying and occupancy costs as a percentage of net sales, despite higher performance-related expenses. Markdowns were reduced considerably from last year's fourth quarter, which was a highly promotional period. The company saw improvement in its management of inventory and ended the year with an inventory turn of 5.4, the highest in recent company history despite a decline in annual same-store sales.
• Retail selling, general and administrative expenses increased $56 million compared with last year's fourth quarter. The increase was due primarily to higher performance-related and variable expenses which increased as a result of the improvement in sales, partially offset by a decrease in fixed expenses. Retail selling, general and administrative expenses also were impacted by an additional $13 million from stores opened since the fourth quarter of 2008. The company opened 3 full-line stores and 13 Nordstrom Rack stores since the fourth quarter of 2008, increasing retail square footage by 0.9 million, or 4.1 percent.
• Credit selling, general, and administrative expenses increased $16 million compared with last year's fourth quarter. The majority of the increase reflects higher bad debt expense. Based on fourth quarter trends and continuing uncertainty regarding the overall economic environment, the company increased its reserve for bad debt by $20 million in the quarter.

FULL YEAR RESULTS

For the fiscal year ended January 30, 2010, net earnings were $441 million, an increase of 10 percent compared with net earnings of $401 million for the fiscal year ended January 31, 2009. Earnings per diluted share for the same periods were $2.01 and $1.83, respectively.

Full year same-store sales decreased 4.2 percent compared with fiscal 2008. Net sales for the year were $8.26 billion, a decrease of 0.2 percent compared with prior year net sales of $8.27 billion.

EXPANSION UPDATE

FISCAL YEAR 2010 OUTLOOK

Nordstrom is planning for 2010 based on recent business trends but with continuing caution about the economic environment and its impact on the customer. Although there was meaningful improvement in the latter half of 2009 that could continue in the first half of 2010, the company believes growth could moderate in the second half of 2010 as it overlaps with the improving trends from the prior year. The company plans to continue to align the key drivers of its business (inventory, expenses, working capital and capital expenditures) to improve profitability, enhance free cash flow, increase return on invested capital and maintain a healthy balance sheet. For the 2010 fiscal year, Nordstrom expects same-store sales to increase 2.0 to 4.0 percent, which yields earnings per share in the range of $2.35 to $2.55 for the full year.

CONFERENCE CALL INFORMATION

The company's senior management will host a conference call to discuss fourth quarter results at 4:45 p.m. Eastern Standard Time today. To listen, please dial 517-308-9140 (passcode: NORD). A telephone replay will be available beginning approximately one hour after the conclusion of the call by dialing 203-369-0107 (passcode: 6673) until the close of business on March 1, 2010. Interested parties may also listen to the live call over the Internet by visiting the Investor Relations section of the company's corporate Web site at http://investor.nordstrom.com. An archived webcast will be available in the Webcasts section through May 24, 2010.

ABOUT NORDSTROM

Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 184 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 112 full-line stores, 69 Nordstrom Racks, two Jeffrey boutiques and one clearance store. Nordstrom also serves customers through its online presence at www.nordstrom.com and through its catalogs. Nordstrom, Inc's common stock is publicly traded on the NYSE under the symbol JWN.

Certain statements in this news release contain "forward-looking" information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties, including, but not limited to, anticipated financial outlook for the fiscal year ending January 29, 2011, anticipated annual same-store sales rate, anticipated store openings and trends in company operations. Such statements are based upon current beliefs and expectations of the company's management and are subject to significant risks and uncertainties. Actual future results may differ materially from historical results or current expectations depending upon factors including but not limited to the impact of deteriorating economic and market conditions and the resultant impact on consumer spending patterns, the company's ability to respond to the business environment and fashion trends, the company's ability to safeguard its brand and reputation, effective inventory management, efficient and proper allocation of the company's capital resources,successful execution of the company's store growth strategy including the timely completion of construction associated with newly planned stores, relocations and remodels, all of which may be impacted by the financial health of third parties, the company's compliance with applicable banking and related laws and regulations impacting the company's ability to extend credit to its customers, trends in personal bankruptcies and bad debt write-offs, availability and cost of credit, impact of the current regulatory environment and financial system reforms, changes in interest rates, disruptions in the company's supply chain, the company's ability to maintain its relationship with vendors and developers who may be experiencing economic difficulties, the geographic locations of the company's stores, the company's ability to maintain its relationships with its employees and to effectively train and develop its future leaders, the company's compliance with information security and privacy laws and regulations, employment laws and regulations and other laws and regulations applicable to the company, successful execution of the company's information technology strategy, successful execution of the company's multi-channel strategy, risks related to fluctuations in world currencies, public health concerns and the resulting impact on consumer spending patterns, supply chain, and employee health, weather conditions and hazards of nature that affect consumer traffic and consumers' purchasing patterns, the effectiveness of planned advertising, marketing, and promotional campaigns, and the company's ability to control costs. Our SEC reports, including our Form 10-K for the fiscal year ended January 31, 2009 our Form 10-Q for the fiscal quarter ended October 31, 2009, and our Form 10-K for the fiscal year ended January 30, 2010, to be filed with the SEC on or about March 19, 2010, contain other information on these and other factors that could affect our financial results and cause actual results to differ materially from any forward-looking information we may provide. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

NORDSTROM, INC.

ADJUSTED DEBT TO EBITDAR (NON-GAAP FINANCIAL MEASURE)

(unaudited; amounts in millions)

We use various financial measures in our conference calls, investor meetings, and other forums which may be considered non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. The following disclosure provides additional information regarding our Adjusted Debt to EBITDAR as of January 30, 2010:

Adjusted Debt to EBITDAR is one of our key financial metrics, and we believe that our debt levels are best analyzed using this measure. Our goal today is to manage debt levels at a point which we believe will help us maintain an investment grade credit rating as well as operate with an efficient capital structure for our size, growth plans and industry. Investment grade credit ratings are important to maintaining access to a variety of short-term and long-term sources of funding, and we rely on these funding sources to continue to grow our business. We believe a higher ratio, among other factors, could result in rating agency downgrades. In contrast, we believe a lower ratio would result in a higher cost of capital and could negatively impact shareholder returns. As of both January 30, 2010 and January 31, 2009, our Adjusted Debt to EBITDAR was 2.5.

Adjusted Debt to EBITDAR is not a measure of financial performance under GAAP and should not be considered a substitute for debt to net earnings, net earnings or debt as determined in accordance with GAAP. In addition, Adjusted Debt to EBITDAR does have limitations:

• Adjusted Debt is not exact, but rather our best estimate of the total company debt we would incur if we had purchased the property associated with our operating leases;
• EBITDAR does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, including leases, or the cash requirements necessary to service interest or principal payments on our debt; and
• Other companies in our industry may calculate Adjusted Debt to EBITDAR differently than we do, limiting its usefulness as a comparative measure.

To compensate for these limitations, we analyze Adjusted Debt to EBITDAR in conjunction with other GAAP financial and performance measures impacting liquidity, including operating cash flows, capital spending and net earnings. The closest GAAP measure is debt to net earnings, which was 5.9 and 6.3 as of January 30, 2010 and January 31, 2009, respectively. The following is a reconciliation of debt to net earnings and Adjusted Debt to EBITDAR:

NORDSTROM, INC.

FREE CASH FLOW (NON-GAAP FINANCIAL MEASURE)

(unaudited; amounts in millions)

We use various financial measures in our conference calls, investor meetings, and other forums which may be considered non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. The following disclosure provides additional information regarding our free cash flow for the years ended January 30, 2010 and January 31, 2009:

Free cash flow is one of our key liquidity measures, and we believe that our cash levels are more appropriately analyzed using this measure. Free cash flow is not a measure of liquidity under GAAP and should not be considered a substitute for operating cash flows as determined in accordance with GAAP. In addition, free cash flow does have limitations:

• Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs; and
• Other companies in our industry may calculate free cash flow differently than we do, limiting its usefulness as a comparative measure.

To compensate for these limitations, we analyze free cash flow in conjunction with other GAAP financial and performance measures impacting liquidity, including operating cash flows. The closest GAAP measure is net cash provided by operating activities, which was $1,251 and $848 for the years ended January 30, 2010 and January 31, 2009. The following is a reconciliation of our net cash provided by operating activities and free cash flow:

SOURCE: Nordstrom, Inc.

Nordstrom, Inc.
INVESTOR CONTACT:
Rob Campbell, 206-303-3290
or
MEDIA CONTACT:
Colin Johnson, 206-373-3036