<page> Exhibit 99.1
For Immediate Release
- ---------------------
February 19, 2004
NORDSTROM FOURTH QUARTER EARNINGS INCREASE 74 PERCENT
-----------------------------------------------------
SEATTLE - February 19, 2004 - Nordstrom, Inc. (NYSE: JWN) today reported net
earnings of $104.3 million, or $0.74 per diluted share, for the fourth quarter
of 2003, which ended January 31, 2004. For the same period last year, net
earnings and earnings per diluted share were $60.0 million and $0.44,
respectively.
On a comparable 4-5-4 basis, total sales for the fourth quarter of 2003
increased 12.0 percent, to $1.9 billion, compared to sales of $1.7 billion in
the same period last year. Fourth quarter 2003 same-store sales increased 8.5
percent.
FOURTH QUARTER HIGHLIGHTS
The company's key strategic initiatives continue to generate operating
improvements, resulting in a 74 percent increase in fourth quarter earnings
compared to the prior year.
- Same-store sales increased 8.5 percent; better than the company's plan
of a two to four percent increase.
- Gross profit improved 350 basis points, driven by strong sell through and
significant improvement in markdowns.
- Selling, general and administrative expenses increased 50 basis points
as a result of higher than expected performance based incentive
compensation expense. All other expense components continue to trend
favorably, collectively improving 100 basis points.
FULL YEAR RESULTS
Fiscal 2003 net earnings and earnings per share for the period ended
January 31,2004, were $242.8 million and $1.76, respectively, compared to net
earnings and earnings per share of $90.2 million and $0.66 for the same period
in fiscal 2002. Excluding $71.0 million (net of tax) in non-recurring and
impairment charges (1),fiscal 2002 net earnings and earnings per diluted share
were $161.3 million and $1.19, respectively.
2003 earnings increased 51 percent over 2002, excluding non-recurring and
impairment charges, reflecting continuing improvement in all key areas of the
business. Ongoing refinement of the merchandise assortments, coupled with
better disciplines in inventory planning and control, have resulted in stores
having more of the right merchandise. The company saw the strongest comp-store
sales and gross margin performance in ten years, and expenses improved on a
percent to sales basis for the third consecutive year.
<page>
On a comparable 4-5-4 basis, 2003 total sales of $6.5 billion increased
8.6 percent from the same period in 2002. Full year same-store sales increased
4.3 percent.
GAAP SALES PERFORMANCE
The additional information provided in this section is to comply with the
Securities and Exchange Commission's Regulation G. The Company converted to a
4-5-4 Retail Calendar at the beginning of 2003. This change in the fiscal
calendar has resulted in differences in the number of days included in the
current period versus the same period in the prior year. Sales performance
numbers included in this sales release have been calculated on a comparative
4-5-4 basis. The Company believes that adjusting for these differences
provides a more comparable basis (4-5-4 vs. 4-5-4) from which to evaluate
sales performance. The following reconciliation bridges 2002 GAAP sales
to the 4-5-4 comparable sales.
<table>
<caption>
Dollar % Change % Change
Sales Reconciliation ($M) QTD 2003 QTD 2002 Increase Total Sales Comp Sales
-------- -------- ---------- ----------- ----------
<s> <c> <c> <c> <c> <c>
Number of Days GAAP 91 92
GAAP Sales $1,932.5 $1,750.6 $181.9 10.4% 7.0%
Less Nov. 1-2, 2002 sales -- ($43.7)
Plus Feb. 1, 2003 sales -- $18.2
Reported 4-5-4 sales $1,932.5 $1,725.1 $207.4 12.0% 8.5%
======== ========
4-5-4 Adjusted Days 91 91
</table>
<table>
<caption>
Dollar % Change % Change
Sales Reconciliation ($M) FY 2003 FY 2002 Increase Total Sales Comp Sales
-------- -------- ---------- ----------- ----------
<s> <c> <c> <c> <c> <c>
Number of Days GAAP 365 365
GAAP Sales $6,491.7 $5,975.1 $516.6 8.6% 4.1%
Less Feb. 1, 2003 ($18.2) -
Less Feb. 1-2, 2002 sales -- ($30.9)
Plus Feb. 1, 2003 sales -- $18.2
Reported 4-5-4 sales $6,473.5 $5,962.4 $511.1 8.6% 4.3%
======== ========
4-5-4 Adjusted Days 364 364
</table>
EXPANSION UPDATE
During fiscal 2003 Nordstrom opened four full-line stores and two Rack
stores. Gross square footage for the year increased approximately 4.0
percent, from 18,428,000 to 19,138,000.
2004 OUTLOOK
The company is providing the following 2004 forecasts:
<table>
<caption>
1st Quarter 2004 Full-Year 2004
---------------- --------------
<s> <c> <c>
Comp-store Sales 4%-6% increase 1%-3% increase
Gross Profit (%) Significant improvement 30-50 basis point increase
Selling, General and
Administrative Expense (%) Moderate improvement 50-70 basis point decrease
Service Charge Income $3-$5 million increase $7-$9 million increase
Interest Expense (see note below) $16-$18 million increase $11-$13 million decrease
Effective Tax Rate 39% 39%
Earnings per Share $0.23 - $0.28 $2.02 - $2.08
Diluted Shares Outstanding Approx. 142 million Approx. 143 million
Prior Year Diluted EPS $0.20 $1.76
</table>
Note: First quarter projections include a $16 to $18 million increase in
Interest expense related to the previously announced debt retirement
scheduled to take place during the first quarter. This additional expense
will lower first quarter earnings per share approximately $0.08. This debt
retirement will lower future interest expense resulting in approximately
$0.02 of earnings benefit in each subsequent quarter.
<page>
CONFERENCE CALL INFORMATION:
Company management will be hosting a conference call and webcast to discuss
fourth quarter results at 4:30pm (EST) today. Access to the conference call is
open to the press and general public 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 800-839-4519. 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 148 US stores located in 27 states. Founded in 1901 as a shoe
store in Seattle, Nordstrom today operates 92 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 - 4th Quarter
-------------------------------------------------
(unaudited; amounts in thousands, except per share data and percentages)
<table>
<caption>
Quarter % of sales Quarter % of sales
ended (except as ended (except as
1/31/04 indicated) 1/31/03 indicated)
------ --------- ------ ---------
<s> <c> <c> <c> <c>
Net sales $1,932,549 100.0 $1,750,586 100.0
Cost of sales and related buying
& occupancy (1,221,988) (63.2) (1,167,682) (66.7)
--------- ---------
Gross profit 710,561 36.8 582,904 33.3
Selling, general and administrative
expenses (562,407) (29.1) (500,461) (28.6)
-------- --------
Operating income 148,154 7.7 82,443 4.7
Interest expense, net (17,909) (0.9) (21,435) (1.2)
Service charge income
and other, net 40,801 2.1 37,326 2.1
-------- --------
Earnings before income taxes 171,046 8.9 98,334 5.6
Income tax expense (66,700) (39.0)(2) (38,300) (38.9)(2)
-------- --------
Net earnings $104,346 5.4 $60,034 3.4
======== ========
Earnings per share
Basic $ 0.76 $ 0.44
Diluted $ 0.74 $ 0.44
</table>
<page>
ADDITIONAL DATA
- ---------------
Average number of shares outstanding
<table>
<caption>
<s> <c> <c>
Basic 137,599 135,438
Diluted 140,690 135,838
</table>
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - Full Year
-----------------------------------------------
(unaudited; amounts in thousands, except per share data and percentages)
<table>
<caption>
Year-to-Date % of sales Year-to-Date % of sales
ended (except as ended (except as
1/31/04 indicated) 1/31/03 indicated)
------ --------- -------- ---------
<s> <c> <c> <c> <c>
Net sales $6,491,673 100.0 $5,975,076 100.0
Cost of sales and related buying
& occupancy (4,213,955) (64.9) (3,966,959) (66.4)
---------- ----------
Gross profit 2,277,718 35.1 2,008,117 33.6
Selling, general and administrative
expenses (1,943,715) (30.0) (1,818,381) (30.4)
---------- --------
Operating income 334,003 5.1 189,736 3.2
Interest expense, net (90,952) (1.4) (81,921) (1.4)
Minority interest purchase - - (53,168) (0.9)
Service charge income
and other, net 155,090 2.4 140,977 2.4
------- --------
Earnings before income taxes and
cumulative effect of accounting change 398,141 6.1 195,624 3.3
Income tax expense (155,300) (39.0)(2) (92,041) (47.0)(2)
-------- --------
Earnings before cumulative effect of
accounting change 242,841 3.7 103,583 1.7
Cumulative effect of accounting
change (net of $8,541 tax) - - (13,359) (0.2)
-------- --------
Net earnings $242,841 3.7 $90,224 1.5
======== ========
Earnings per share
Basic $1.78 $ 0.67
Diluted $1.76 $ 0.66
</table>
ADDITIONAL DATA
- ---------------
Average number of shares outstanding
<table>
<caption>
<s> <c> <c>
Basic 136,329 135,107
Diluted 137,739 135,724
</table>
Investor Contact: Media Contact:
Stephanie Allen, 206-303-3262 Shasha Richardson, 206-373-3038
<fn>
(1) Prior year-to-date net earnings excluding non-recurring and impairment
charges is the sum of net earnings of $90,224, the cumulative effect of
accounting change of $13,359 (net of tax), non-recurring minority interest
purchase and reintegration costs of $48,184 (net of tax) and the write-down
of the investment in a supply chain tool of $9,498 (net of tax).
(2) Percent of earnings before income taxes. For quarter-to-date and
year-to-date 2003, 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.