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Exhibit 99.1
For Immediate Release
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August 21, 2003
NORDSTROM REPORTS SECOND QUARTER EARNINGS
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SEATTLE - August 21, 2003 - Nordstrom, Inc. (NYSE: JWN) today reported
net earnings of $65.9 million, or $0.48 per diluted share, for the second
quarter of 2003, which ended August 2, 2003. For the same period last year,
net earnings and earnings per diluted share were $36.3 million and $0.27,
respectively. Excluding $16.1 million (net of tax) in non-recurring and
impairment charges(1), second quarter 2002 net earnings and earnings per
diluted share were $52.4 million and $0.39, respectively. Better-than-plan
sales and expenses drove the 26 percent increase in earnings for the quarter,
excluding 2002 non-recurring and impairment charges.
Net sales for the second quarter of 2003 increased 7.9 percent, to $1.8
billion, compared to sales of $1.7 billion in the same period last year.
Second quarter 2003 same-store sales increased 3.9 percent.
"We have worked very hard to improve our service, which has resulted in
better sales," commented President Blake Nordstrom. "Strong sales coupled
with disciplined expense control resulted in enhanced margins for the quarter.
We feel we are headed in the right direction."
Year-to-date net earnings and earnings per share for the period ended
August 2, 2003, were $93.0 million and $0.68 respectively, compared to net
earnings and earnings per share of $11.8 million and $0.09 for the same period
in 2002. Excluding $71.0 million (net of tax) in non-recurring and impairment
charges(2), year-to-date 2002 net earnings and earnings per diluted share were
$82.8 million and $0.61, respectively.
Year-to-date net sales of $3.1 billion increased 6.0 percent from the
same period in 2002. Year-to-date same store sales increased 1.6 percent.
EXPANSION UPDATE
During the second quarter of 2003 Nordstrom did not open any stores.
Three stores were opened in the month of August: a full-line store in Austin,
Texas, and two Rack stores in Chicago, Ill. and Ft. Lauderdale, Fla.
Throughout the remainder of the year ending January 31, 2004, Nordstrom
expects to open two full-line stores in Richmond, Va. and West Palm Beach,
Fla. Gross square footage for the year is expected to increase approximately
4.0 percent, from 18,428,000 to 19,109,000.
GAAP SALES PERFORMANCE
The additional information provided in this section is to comply with the
Securities and Exchange Commission's Regulation G. The Company converted to a
4-5-4 Retail Calendar at the beginning of 2003. This change in the fiscal
calendar has resulted in differences in the number of days included in the
current period versus the same period in the prior year. Sales performance
numbers included in this release have been calculated on a comparative 4-5-4
basis. The Company believes that adjusting for these differences provides a
more comparable basis (4-5-4 vs. 4-5-4) from which to evaluate sales
performance. The following reconciliation bridges 2002 GAAP sales to the 4-5-
4 comparable sales.
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<caption>
Dollar % Change % Change
Sales Reconciliation ($M) QTD 2003 QTD 2002 Increase Total Sales Comp Sales
-------- -------- ---------- ----------- ----------
<s> <c> <c> <c> <c> <c>
Number of Days GAAP 91 92
GAAP Sales $1,795.0 $1,655.6 $139.4 8.4% 4.5%
Less May 1-4, 2002 sales - ($65.2)
Plus August 1-3, 2002 sales - $73.0
Reported 4-5-4 sales $1,795.0 $1,663.4 $131.6 7.9% 3.9%
4-5-4 Adjusted Days ======== ========
91 91
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<caption>
Dollar % Change % Change
Sales Reconciliation ($M) YTD 2003 YTD 2002 Increase Total Sales Comp Sales
-------- -------- ---------- ----------- ----------
<s> <c> <c> <c> <c> <c>
Number of Days GAAP 183 181
GAAP Sales $3,138.5 $2,901.3 $237.2 8.2% 3.1%
Less Feb. 1, 2003 sales ($18.2) -
Less Feb. 1-2, 2002 sales - ($30.4)
Plus August 1-3, 2002 sales - $73.0
Reported 4-5-4 sales $3,120.3 $2,943.9 $176.4 6.0% 1.6%
4-5-4 Adjusted Days ======== ========
182 182
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2003 OUTLOOK
The Company is providing the following 2003 forecasts:
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3rd Quarter 2003 Full-Year 2003
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<s> <c> <c>
Comp-store Sales Low single digit increase Low single digit increase
Gross Profit (%) Flat Slight Improvement
Selling, General and
Administrative Expense (%) Moderate Improvement Slight Improvement
Service Charge Income Increase $4-6 million Increase $6-10 million
Interest Expense Decrease $1-2 million Increase $4-6 million
Effective Tax Rate 39% 39%
Earnings per Share $0.16 - $0.20 $1.33 - $1.37
Square footage growth 4%
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CONFERENCE CALL INFORMATION:
Company management will be hosting a conference call and webcast to
discuss second quarter results at 4:15pm (EDT) today. Access to the conference
call is open to the press and general public
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in a listen only mode. To participate, please dial, 212-547-0138 ten minutes
prior to the call (passcode: NORD). A telephone replay will be available for
48 hours beginning approximately one hour after the conclusion of the call by
dialing 800-214-3608. Interested parties may also access the call over the
Internet by visiting the Investor Relations section of the company's corporate
website at http://about.nordstrom.com/aboutus/investor/webcasts.asp. An
archived version of the webcast will be available at this location for 30
days.
Nordstrom, Inc. is one of the nation's leading fashion specialty
retailers, with 146 US stores located in 27 states. Founded in 1901 as a shoe
store in Seattle, Nordstrom today operates 90 full-line stores, 49 Nordstrom
Racks, five U.S. Faconnable boutiques, one freestanding shoe store, and one
clearance store. Nordstrom also operates 31 international Faconnable
boutiques, primarily in Europe. Additionally, Nordstrom Direct serves
customers through its online presence at http://www.nordstrom.com and through
its direct mail catalogs.
Certain statements in this news release contain "forward-looking"
information (as defined in the Private Securities Litigation Reform Act of
1995) that involves risks and uncertainties, including anticipated results,
store openings and distribution channels, planned capital expenditures, and
trends in company operations. Actual future results and trends may differ
materially from historical results or current expectations depending upon
factors including, but not limited to, the company's ability to predict
fashion trends, consumer apparel buying patterns, the company's ability to
control costs, weather conditions, hazards of nature such as earthquakes and
floods, trends in personal bankruptcies and bad debt write-offs, changes in
interest rates, employee relations, the company's ability to continue its
expansion plans, and the impact of economic and competitive market forces,
including the impact of terrorist activity or the impact of a war on the
company, its customers and the retail industry. Our SEC reports may 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.
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - 2nd Quarter
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(unaudited; amounts in thousands, except per share data and percentages)
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<caption>
Quarter % of sales Quarter % of sales
ended (except as ended (except as
8/2/03 indicated) 7/31/02 indicated)
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<s> <c> <c> <c> <c>
Net sales $1,794,975 100.0 $1,655,528 100.0
Cost of sales and related
buying & occupancy (1,192,195) (66.4) (1,104,035) (66.7)
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Gross profit 602,780 33.6 551,493 33.3
Selling, general and
administrative expenses (504,656) (28.1) (496,915) (30.0)
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Operating income 98,124 5.5 54,578 3.3
Interest expense, net (26,134) (1.5) (19,605) (1.2)
Minority interest purchase - - (11,121) (0.6)
Service charge income
and other, net 36,081 2.0 35,341 2.1
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Earnings before income taxes 108,071 6.0 59,193 3.6
Income tax expense (42,200) (39.0)(3) (22,858) (38.6)(3)
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Net earnings $ 65,871 3.7 $ 36,335 2.2
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Earnings per share
Basic $ 0.48 $ 0.27
Diluted $ 0.48 $ 0.27
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ADDITIONAL DATA
Average number of shares outstanding
Basic 135,844 135,066
Diluted 136,338 135,820
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NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - Year-to-Date
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(unaudited; amounts in thousands, except per share data and percentages)
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<caption>
Year- Year-
to-Date % of sales to-Date % of sales
ended (except as ended (except as
8/2/03 indicated) 7/31/02 indicated)
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<s> <c> <c> <c> <c>
Net sales $3,138,514 100.0 $2,901,289 100.0
Cost of sales and related
buying & occupancy (2,080,653) (66.3) (1,927,123) (66.4)
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Gross profit 1,057,861 33.7 974,166 33.6
Selling, general and
administrative expenses (930,686) (29.6) (882,999) (30.5)
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Operating income 127,175 4.1 91,167 3.1
Interest expense, net (46,362) (1.5) (39,654) (1.4)
Minority interest purchase - - (53,168) (1.8)
Service charge income
and other, net 71,713 2.3 68,645 2.4
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Earnings before income taxes
and cumulative effect of
accounting change 152,526 4.9 66,990 2.3
Income tax expense (59,500) (39.0)(3) (41,868) (62.5)(3)
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Earnings before cumulative
effect of accounting change 93,026 3.0 25,122 0.9
Cumulative effect of accounting
change (net of tax) - - (13,359) (0.5)
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Net earnings $ 93,026 3.0 $ 11,763 0.4
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Earnings per share
Basic $ 0.69 $ 0.09
Diluted $ 0.68 $ 0.09
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ADDITIONAL DATA
Average number of shares outstanding
Basic 135,710 134,887
Diluted 136,016 135,766
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Investor Contact: Media Contact:
Stephanie Allen, 206-303-3262 Shasha Richardson, 206-373-3038
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(1) Prior year quarter-to-date net earnings excluding charges is the sum of
net earnings of $36,335, the additional non-recurring expenses related to the
minority interest purchase and reintegration costs of $6,527 (net of tax) and
the write-down of the investment in a supply chain tool of $9,498 (net of
tax). Excluding these charges, earnings and earnings per share were $52,360
and $0.39, respectively.
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(2) Prior year-to-date net earnings excluding charges is the sum of net
earnings of $11,763, the cumulative effect of accounting change of $13,359
(net of tax), non-recurring minority interest purchase and reintegration costs
of $48,185 (net of tax) and the write-down of the investment in a supply chain
tool of $9,498 (net of tax). Excluding these charges, earnings and earnings
per share were $82,805 and $0.61, respectively.
(3) Percent of earnings before income taxes. For year-to-date 2002, income
tax expense as a percent of earnings before income taxes is higher than
Nordstrom's effective tax rate as the Company did not recognize a tax benefit
from certain costs related to the minority interest purchase.