SEATTLE--(BUSINESS WIRE)--May. 14, 2009--
Nordstrom, Inc. (NYSE:JWN) today reported net earnings of $81 million,
or $0.37 per diluted share, for the first quarter ended May 2, 2009. For
the same quarter last year, Nordstrom reported net earnings of $119
million, or $0.54 per diluted share. Included in the 2009 first quarter
results was a benefit of approximately $12 million, or $0.06 per diluted
share, related to the closure of the company’s 2007 federal tax return
audit. Excluding this benefit, 2009 first quarter net earnings were $69
million, or $0.31 per share.
Net sales in the first quarter were $1.71 billion, a decrease of 9.2
percent compared with sales of $1.88 billion during the same period in
fiscal 2008. First quarter same-store sales decreased 13.2 percent
compared with the same period in fiscal 2008.
FIRST QUARTER SUMMARY
In the first quarter, overall business trends were consistent with the
company’s business plans. The company planned sales based on recent
trends and maintained its discipline with respect to inventory and
expenses, allowing it to exceed earnings plans.
-
Full-line same-store sales decreased 16.5 percent. Sales for Nordstrom
Direct were approximately flat. Top-performing merchandise categories
were dresses, junior women’s apparel and cosmetics, while the South
and Mid-Atlantic regions were the top-performing geographic areas.
-
Nordstrom Rack outperformed most of its off-price competitors with a
same-store sales increase of 1.2 percent.
-
Gross profit, as a percentage of net sales, decreased 215 basis points
compared with last year’s first quarter. Approximately half of the
decline was due to the impact of fixed buying and occupancy costs as a
percentage of reduced sales. The company was effective in aligning its
inventory levels with its current sales trends. Quarter-end total
inventory per square foot was down 12 percent from the prior year,
which is better than total company sales trends.
-
Retail selling, general and administrative expenses decreased $46
million compared with last year’s first quarter. Excluding $17 million
in additional expenses from stores opened since the first quarter of
2008, retail selling, general and administrative expenses decreased
$63 million. The company opened 6 full-line stores and 10 Nordstrom
Rack stores since the first quarter of 2008, increasing retail square
footage by 1.2 million or 5.7 percent.
-
Credit selling, general and administrative expenses increased $42
million compared with last year’s first quarter due to higher
charge-offs and additions to reserves for bad debt.
EXPANSION UPDATE
On March 6, 2009, Nordstrom relocated and opened a full-line store at
Fashion Place in Murray, Utah. On March 27, 2009, it opened a
143,000-square-foot full-line store at Cherry Hill Mall in Cherry Hill,
New Jersey, and on April 17, 2009, it opened a 143,000-square-foot
full-line store at Northshore Mall in Peabody, Massachusetts.
During the first quarter of fiscal 2009, Nordstrom also opened four
Nordstrom Rack stores at Bergen Town Center in Paramus, New Jersey, Park
Lane in Dallas, Texas, The Commons at Southtowne in Sandy, Utah and
Orland Park Place in Orland Park, Illinois. On May 7, 2009, Nordstrom
opened a Nordstrom Rack store at Ravenswood 101 in East Palo Alto,
California.
FISCAL YEAR 2009 OUTLOOK
Based on first quarter performance, the company is revising its outlook
for the 2009 fiscal year to reflect increases in gross profit and credit
card revenue, partly offset by an increase in bad debt expense. For the
2009 fiscal year, Nordstrom expects earnings per diluted share in the
range of $1.25 to $1.50, increased from the previous range of $1.10 to
$1.40. The company’s revised expectations for fiscal 2009, which include
the impact of $0.06 per diluted share tax benefit described above, are
as follows:
|
Same-store Sales
|
|
10% to 15% decrease
|
|
|
Gross Profit (%)
|
|
130 to 200 basis point decrease
|
|
|
Retail Selling, General and Admin. Expense ($)
|
|
$100 to $200 million decrease
|
|
|
Credit Card Revenue
|
|
$75 to $80 million increase
|
|
|
Credit Selling, General and Admin. Expense ($)
|
|
$35 to $45 million increase
|
|
|
Total Selling, General and Admin. Expense (%)
|
|
90 to 120 basis point increase
|
|
|
Interest Expense, net
|
|
$20 to $25 million increase
|
|
|
Effective Tax Rate
|
|
36.5% to 37.0%
|
|
|
Earnings per Diluted Share
|
|
$1.25 to $1.50
|
|
|
Diluted Shares Outstanding
|
|
218 million
|
|
CONFERENCE CALL INFORMATION
The company’s senior management will host a conference call to discuss
first quarter results at 4:30 p.m. Eastern Daylight Time today. To
listen, please dial 630-395-0076 (passcode: NORD). A telephone replay
will be available beginning approximately one hour after the conclusion
of the call by dialing 203-369-0463 until the close of business on May
21, 2009. 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
August 12, 2009.
ABOUT NORDSTROM
Nordstrom, Inc. is one of the nation's leading fashion specialty
retailers, with 176 stores located in 28 states. Founded in 1901 as a
shoe store in Seattle, today Nordstrom operates 111 full-line stores, 61
Nordstrom Racks, two Jeffrey boutiques, and two clearance stores.
Nordstrom also serves customers through its online presence at http://www.nordstrom.com
and through its catalogs. Nordstrom, Inc. 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 30, 2010, 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 and trends 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, 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, weather conditions and hazards of nature that affect
consumer traffic and consumers' purchasing patterns, the effectiveness
of planned advertising, marketing, and promotional campaigns, the
company’s ability to control costs, and the timing and amounts of share
repurchases by the company. Our SEC reports, including our Form 10-K for
the fiscal year ended January 31, 2009, 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.
|
|
CONSOLIDATED STATEMENTS OF EARNINGS – 1st Quarter
|
|
(unaudited; amounts in millions, except per share data)
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
ended
|
|
ended
|
|
|
5/2/09
|
|
|
5/3/08
|
|
|
|
|
|
|
Net sales
|
$
|
1,706
|
|
|
$
|
1,879
|
|
|
Credit card revenues
|
|
86
|
|
|
|
70
|
|
|
Total revenues
|
|
1,792
|
|
|
|
1,949
|
|
|
Cost of sales and related buying &
|
|
|
|
|
occupancy costs
|
|
(1,107
|
)
|
|
|
(1,179
|
)
|
|
Selling, general and administrative expenses:
|
|
|
|
|
Retail stores, direct and other segments
|
|
(447
|
)
|
|
|
(493
|
)
|
|
Credit segment
|
|
(92
|
)
|
|
|
(50
|
)
|
|
Earnings before interest and income taxes
|
|
146
|
|
|
|
227
|
|
|
Interest expense, net
|
|
(31
|
)
|
|
|
(31
|
)
|
|
Earnings before income taxes
|
|
115
|
|
|
|
196
|
|
|
Income tax expense
|
|
(34
|
)
|
|
|
(77
|
)
|
|
Net earnings
|
$
|
81
|
|
|
$
|
119
|
|
|
Earnings per share
|
|
|
|
|
Basic
|
$
|
0.38
|
|
|
$
|
0.54
|
|
|
Diluted
|
$
|
0.37
|
|
|
$
|
0.54
|
|
|
|
|
|
|
ADDITIONAL DATA
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
Basic
|
|
215.9
|
|
|
|
218.6
|
|
|
Diluted
|
|
217.4
|
|
|
|
221.7
|
|
|
NORDSTROM, INC.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(unaudited; amounts in millions)
|
|
|
|
|
|
5/2/09
|
|
|
5/3/08
|
|
|
|
|
Assets
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
78
|
|
$
|
119
|
|
|
Accounts receivable, net
|
|
1,921
|
|
|
1,806
|
|
|
Merchandise inventories
|
|
1,004
|
|
|
1,079
|
|
|
Current deferred tax assets, net
|
|
220
|
|
|
181
|
|
|
Prepaid expenses and other
|
|
70
|
|
|
75
|
|
|
Total current assets
|
|
3,293
|
|
|
3,260
|
|
|
Land, buildings and equipment, net
|
|
2,231
|
|
|
2,061
|
|
|
Goodwill
|
|
53
|
|
|
53
|
|
|
Other assets
|
|
183
|
|
|
212
|
|
|
Total assets
|
$
|
5,760
|
|
$
|
5,586
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
Current liabilities:
|
|
|
|
Commercial Paper
|
$
|
265
|
|
$
|
–
|
|
|
Accounts payable
|
|
594
|
|
|
638
|
|
|
Accrued salaries, wages and related benefits
|
|
182
|
|
|
197
|
|
|
Other current liabilities
|
|
539
|
|
|
568
|
|
|
Current portion of long-term debt
|
|
375
|
|
|
260
|
|
|
Total current liabilities
|
|
1,955
|
|
|
1,663
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net
|
|
1,862
|
|
|
2,235
|
|
|
Deferred property incentives, net
|
|
459
|
|
|
381
|
|
|
Other liabilities
|
|
210
|
|
|
249
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
Common stock, no par value: 1,000 shares authorized;
|
|
|
|
|
|
|
|
216.2 and 216.9 shares issued and outstanding
|
|
1,014
|
|
|
957
|
|
|
Retained earnings
|
|
269
|
|
|
123
|
|
|
Accumulated other comprehensive loss
|
|
(9
|
)
|
|
(22
|
)
|
|
Total shareholders’ equity
|
|
1,274
|
|
|
1,058
|
|
|
Total liabilities and shareholders’ equity
|
$
|
5,760
|
|
$
|
5,586
|
|
|
NORDSTROM, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(unaudited; amounts in millions)
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
ended
|
|
ended
|
|
|
|
5/2/09
|
|
|
5/3/08
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
Net earnings
|
$
|
81
|
|
$
|
119
|
|
|
Adjustments to reconcile net earnings to net cash
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
Depreciation and amortization of buildings and equipment
|
|
|
|
|
|
77
|
|
|
72
|
|
|
Amortization of deferred property incentives and other, net
|
|
|
|
|
|
(10
|
)
|
|
(10
|
)
|
|
Stock-based compensation expense
|
7
|
|
6
|
|
|
Deferred income taxes, net
|
|
(20
|
)
|
|
(10
|
)
|
|
Tax benefit from stock-based payments
|
1
|
|
2
|
|
|
Excess tax benefit from stock-based payments
|
|
(1
|
)
|
|
(2
|
)
|
|
Provision for bad debt expense
|
|
67
|
|
|
26
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(16
|
)
|
|
(1
|
)
|
|
Merchandise inventories
|
|
(114
|
)
|
|
(139
|
)
|
|
Prepaid expenses
|
3
|
|
–
|
|
|
Other assets
|
|
(4
|
)
|
1
|
|
|
Accounts payable
|
|
84
|
|
|
110
|
|
|
Accrued salaries, wages and related benefits
|
|
(32
|
)
|
|
(71
|
)
|
|
Other current liabilities
|
|
(16
|
)
|
|
(5
|
)
|
|
Income taxes
|
|
47
|
|
|
23
|
|
|
Deferred property incentives
|
|
42
|
|
|
28
|
|
|
Other liabilities
|
9
|
|
4
|
|
|
Net cash provided by operating activities
|
|
205
|
|
|
153
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
Capital expenditures
|
|
(102
|
)
|
|
(142
|
)
|
|
Change in accounts receivable originated at third parties
|
|
|
|
|
|
(30
|
)
|
|
(42
|
)
|
|
Other, net
|
–
|
|
|
(1
|
)
|
|
Net cash used in investing activities
|
|
(132
|
)
|
|
(185
|
)
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
Payments on commercial paper
|
|
(10
|
)
|
–
|
|
|
Principal payments on long-term borrowings
|
|
(1
|
)
|
|
(2
|
)
|
|
(Decrease) increase in cash book overdrafts
|
|
(32
|
)
|
2
|
|
|
Proceeds from exercise of stock options
|
3
|
|
5
|
|
|
Proceeds from employee stock purchase plan
|
7
|
|
9
|
|
|
Excess tax benefit from stock-based payments
|
1
|
|
2
|
|
|
Cash dividends paid
|
|
(35
|
)
|
|
(35
|
)
|
|
Repurchase of common stock
|
–
|
|
|
(188
|
)
|
|
Net cash used in financing activities
|
|
(67
|
)
|
|
(207
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
6
|
|
|
(239
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
72
|
|
|
358
|
|
|
Cash and cash equivalents at end of period
|
$
|
78
|
|
$
|
119
|
|
|
NORDSTROM, INC.
STATEMENTS OF EARNINGS BY
SEGMENT– 1st Quarter
(unaudited; amounts in millions, except percentages)
|
|
|
|
|
|
|
|
Our Retail Stores segment includes our full-line and Rack stores;
our Direct segment includes our online store; and our Other
segment includes our product development group and corporate
center operations. The following table summarizes the results of
our Retail Stores, Direct and Other segments for the quarter ended
May 2, 2009 compared with the quarter ended May 3, 2008:
|
|
|
|
|
|
|
|
|
Quarter ended 5/2/09
|
|
|
Quarter ended 5/3/08
|
|
|
Amount
|
|
% of sales1
|
|
Amount
|
|
% of sales1
|
|
|
|
Net sales
|
$
|
1,706
|
|
|
100.0
|
%
|
|
$
|
1,879
|
|
|
100.0
|
%
|
|
Cost of sales and related buying & occupancy costs
|
|
|
|
|
|
|
|
|
|
(1,095
|
)
|
|
(64.2
|
%)
|
|
|
(1,170
|
)
|
|
(62.2
|
%)
|
|
Gross profit
|
|
611
|
|
|
35.8
|
%
|
|
|
709
|
|
|
37.8
|
%
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
(447
|
)
|
|
(26.2
|
%)
|
|
|
(493
|
)
|
|
(26.2
|
%)
|
|
Earnings before interest and income taxes
|
|
|
|
|
|
|
|
|
|
164
|
|
|
9.6
|
%
|
|
|
216
|
|
|
11.5
|
%
|
|
Interest expense, net
|
|
(21
|
)
|
|
(1.2
|
%)
|
|
|
(18
|
)
|
|
(1.0
|
%)
|
|
Earnings before income taxes
|
$
|
143
|
|
|
8.4
|
%
|
|
$
|
198
|
|
|
10.5
|
%
|
|
|
|
1 Subtotals and totals may not foot due to rounding.
|
Our Credit segment earns finance charges and late fee income through
operation of the Nordstrom private label and Nordstrom VISA credit
cards. The following table summarizes the results of our Credit segment
for the quarter ended May 2, 2009 compared with the quarter ended May 3,
2008:
|
|
Quarter
|
|
Quarter
|
|
|
ended
|
|
ended
|
|
|
5/2/09
|
|
5/3/08
|
|
|
|
Credit card revenues
|
$
|
86
|
|
|
$
|
70
|
|
|
Interest expense
|
|
(10
|
)
|
|
|
(13
|
)
|
|
Net credit card income
|
|
76
|
|
|
|
57
|
|
|
Cost of sales – loyalty program
|
|
(12
|
)
|
|
|
(9
|
)
|
|
Selling, general and administrative expenses:
|
|
|
|
|
Operational and marketing expense
|
|
(25
|
)
|
|
|
(24
|
)
|
|
Bad debt expense
|
|
(67
|
)
|
|
|
(26
|
)
|
|
Earnings before income taxes
|
$
|
(28
|
)
|
|
$
|
(2
|
)
|
Source: Nordstrom, Inc.
Nordstrom, Inc.
INVESTOR CONTACT: Rob Campbell,
206-303-3290
MEDIA CONTACT: Brooke White, 206-373-3030
|
