<page> Exhibit 99.1
For Immediate Release
- ---------------------
November 20, 2006
NORDSTROM REPORTS THIRD QUARTER EARNINGS PER SHARE INCREASE 33 PERCENT
SEATTLE - November 20, 2006 - Nordstrom, Inc. (NYSE: JWN) today reported
net earnings of $135.7 million, or $0.52 per diluted share, for the third
quarter ended October 28, 2006. For the same period last year, net earnings
were $107.5 million, or $0.39 per diluted share.
Total sales for the third quarter of 2006 increased 12.4 percent to $1.9
billion, compared to sales of $1.7 billion in the same period last year.
Third quarter same-store sales increased 10.7 percent.
THIRD QUARTER HIGHLIGHTS
Net earnings increased 26.3 percent in the third quarter compared to the
same quarter last year, primarily due to the company's improved execution of
its merchandising strategy. The company continues to focus on providing
customers with compelling merchandise and superior service.
- Same-store sales increased 10.7 percent for the quarter. All major
merchandise categories performed above the company's low single digit
growth plan. Results in intimate apparel, accessories, women's better and
designer apparel exceeded the company's overall percentage increase. The
company's Direct and Rack channels achieved double digit same-store sales
increases.
- Gross profit as a percent of sales increased 156 basis points versus the
prior year. Merchandise margin improved versus the prior year driven
primarily by lower markdowns, particularly in women's apparel. Above plan
sales results created incremental leverage on buying and occupancy
expenses.
- Selling, general and administrative expenses as a percent to sales
decreased 17 basis points versus the prior year. Total sales growth
outpaced an increase in general and administrative expenses. Further rate
improvement was held back by a rise in compensation costs linked to the
price of the company's stock, which appreciated 38.4 percent in the
quarter. This cost increase impacted the total SG&A expense rate by 64
basis points, and diluted earnings per share by $0.03 for the quarter.
- As a result of the adoption of SFAS No. 123(R), "Share-Based Payment," the
company recorded $6.5 million in compensation expense, which resulted in a
$0.01 impact on diluted earnings per share for the quarter. Of the total
expense, $2.9 million was recorded in buying and occupancy and $3.6
million was recorded in selling, general and administrative expenses.
YEAR-TO-DATE RESULTS
Year-to-date net earnings increased 23.5 percent to $445.7 million for the
three quarters ended October 28, 2006, compared to net earnings of $360.9
million for the same period last year. Earnings per diluted share for the
same periods were $1.67 and $1.30, respectively.
Year-to-date total sales increased 9.3 percent to $5.9 billion compared to
prior year sales of $5.4 billion. Same-store sales increased 7.2 percent.
EXPANSION AND CAPITAL INVESTMENT UPDATE
Nordstrom opened its newly relocated store at Westfield Topanga Mall in
Canoga Park, Calif., on October 6, 2006. The 213,000 square foot, three-level
store features the company's most comprehensive designer offering in the
country along with new design concepts, amenities and services.
The company opened a new 35,000 square foot Nordstrom Rack store at Grand
Plaza in San Marcos, Calif., on November 16, 2006.
<page>
Nordstrom announced plans today to open three new stores and for one store
relocation.
- In the spring of 2009, Nordstrom will open a newly relocated 140,000
square foot store at the Fashion Place, in Murray, Utah.
- In the fall of 2009, Nordstrom will open a new 140,000 square foot store
at the Kenwood Towne Centre in Cincinnati, Ohio.
- In the spring of 2010, Nordstrom will open a new 140,000 square foot store
at the St. Louis Galleria in St. Louis, Missouri.
- In the spring of 2011, Nordstrom will open a new 140,000 square foot store
at the Christiana Mall in Wilmington, Delaware.
Nordstrom's board of directors recently approved the company's budget for
capital expenditures for the 2007 through 2011 fiscal years. The total amount
planned is for $2.8 billion over the five years, with approximately 80% of the
capital allocated to new stores, store relocations and store remodels.
SHARE REPURCHASE
Nordstrom repurchased approximately 896,000 shares of its common stock
during the third quarter for $32.6 million. This reduction in weighted-
average shares outstanding had no material impact on diluted earnings per
share for the quarter.
2006 OUTLOOK
For the 53 week fiscal year ending February 3, 2007, the company now
anticipates diluted earnings per share in the range of $2.46 to $2.51,
including an estimated expense of $0.06 per diluted share for stock option
compensation following the adoption of SFAS No. 123(R) at the beginning of
this fiscal year. For the 14 week fourth quarter, the company is planning low
single digit same-store sales growth and earnings per share in the range of
$0.79 to $0.84. Under the 4-5-4 retail calendar, the 2006 fourth quarter and
fiscal year include an additional week.
CONFERENCE CALL INFORMATION:
Company management will be hosting a conference call and webcast to
discuss third quarter results at 4:30 p.m. (ET) 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 866-444-
9038. 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 157 US stores located in 27 states. Founded in 1901 as a shoe
store in Seattle, today Nordstrom operates 99 full-line stores, 50 Nordstrom
Racks, five Faconnable boutiques, one free-standing shoe store, and two
clearance stores. Nordstrom also operates 35 international Faconnable
boutiques in Europe. Additionally, Nordstrom 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.
<page>
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 for
the fiscal year ending February 3, 2007 and the fourth quarter, store openings
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 impact of economic and competitive
market forces, the impact of terrorist activity or the impact of a war on the
company, its customers and the retail industry, the company's ability to
predict fashion trends, consumer apparel buying patterns, trends in personal
bankruptcies and bad debt write-offs, changes in interest rates, employee
relations, the company's ability to continue its expansion plans, changes in
government or regulatory requirements, the company's ability to control costs,
weather conditions and hazards of nature. Our SEC reports, including our Form
10-K for the fiscal year ended January 28, 2006 and our Form 10-Q for the
quarter ended October 28, 2006 to be filed with the SEC, 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.
Investor Contact: Media Contact:
RJ Jones, 206-303-3007 Deniz Anders, 206-373-3038
<page>
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - 3rd Quarter
-----------------------------------------------------
(unaudited; amounts in thousands, except per share data and percentages)
<table>
<caption>
Quarter % of sales (1) Quarter % of sales (1)
ended (except as ended (except as
10/28/06 indicated) 10/29/05 indicated)
-------- ---------- -------- ---------
<s> <c> <c> <c> <c>
Net sales $1,872,103 100.0% $1,666,130 100.0%
Cost of sales and related buying
& occupancy costs (1,160,123) (62.0%) (1,058,452) (63.5%)
---------- ----------
Gross profit 711,980 38.0% 607,678 36.5%
Selling, general and
administrative expenses (538,210) (28.7%) (481,768) (28.9%)
---------- ----------
Operating income 173,770 9.3% 125,910 7.6%
Interest expense, net (11,419) (0.6%) (10,248) (0.6%)
Other income including
finance charges, net 58,819 3.1% 47,350 2.8%
---------- ----------
Earnings before income tax expense 221,170 11.8% 163,012 9.8%
Income tax expense (85,497) (38.7%) (2) (55,559) (34.1%) (2)
---------- ----------
Net earnings $135,673 7.2% $107,453 6.4%
========== ==========
Earnings per share
Basic $0.53 $0.40
Diluted $0.52 $0.39
</table>
ADDITIONAL DATA
- ---------------
<table>
<caption>
Weighted average shares outstanding
<s> <c> <c>
Basic 256,757 271,599
Diluted 261,616 277,293
</table>
1Subtotals and totals may not foot due to rounding.
2Percent of earnings before income tax expense.
<page>
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - Year to Date
-----------------------------------------------------
(unaudited; amounts in thousands, except per share data and percentages)
<table>
<caption>
Nine Months % of sales (1) Nine Months % of sales (1)
ended (except as ended (except as
10/28/06 indicated) 10/29/05 indicated)
---------- ---------- ---------- ---------
<s> <c> <c> <c> <c>
Net sales $5,929,794 100.0% $5,427,042 100.0%
Cost of sales and related buying
& occupancy costs (3,729,759) (62.9%) (3,452,132) (63.6%)
---------- ----------
Gross profit 2,200,035 37.1% 1,974,910 36.4%
Selling, general and
Administrative expenses (1,611,982) (27.2%) (1,498,386) (27.6%)
---------- ----------
Operating income 588,053 9.9% 476,524 8.8%
Interest expense, net (34,953) (0.6%) (33,791) (0.6%)
Other income including
finance charges, net 173,508 2.9% 135,052 2.5%
---------- ----------
Earnings before income tax expense 726,608 12.3% 577,785 10.6%
Income tax expense (280,950) (38.7%) (2) (216,876) (37.5%) (2)
---------- ----------
Net earnings $445,658 7.5% $360,909 6.7%
========== ==========
Earnings per share
Basic $1.70 $1.32
Diluted $1.67 $1.30
</table>
ADDITIONAL DATA
- ---------------
<table>
<caption>
Weighted average shares outstanding
<s> <c> <c>
Basic 261,920 272,683
Diluted 266,893 278,399
</table>
1Subtotals and totals may not foot due to rounding.
2Percent of earnings before income tax expense.
<page>
NORDSTROM, INC.
<page>
NORDSTROM, INC.
CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------
(unaudited; amounts in thousands)
<table>
<caption>
10/28/06 1/28/06 10/29/05
---------- ---------- ----------
<s> <c> <c> <c>
Assets
Current assets:
Cash and cash equivalents $ 208,715 $ 462,656 $ 205,943
Short-term investments - 54,000 34,000
Accounts receivable, net 667,748 639,558 626,864
Investment in asset backed securities 313,656 561,136 509,759
Merchandise inventories 1,228,230 955,978 1,166,471
Current deferred tax assets, net 169,858 145,470 149,622
Prepaid expenses and other 65,711 55,359 53,451
----------- ----------- -----------
Total current assets 2,653,918 2,874,157 2,746,110
Land, buildings and equipment, net 1,748,395 1,773,871 1,778,579
Goodwill 51,714 51,714 51,714
Acquired tradename 84,000 84,000 84,000
Other assets 170,355 137,607 129,130
----------- ----------- -----------
Total assets $4,708,382 $4,921,349 $4,789,533
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 758,402 540,019 683,137
Accrued salaries, wages and related benefits 253,440 285,982 235,137
Other current liabilities 385,767 409,076 365,872
Income taxes payable 42,970 81,617 47,850
Current portion of long-term debt 106,572 306,618 306,967
----------- ----------- -----------
Total current liabilities 1,547,151 1,623,312 1,638,963
Long-term debt, net 624,631 627,776 626,978
Deferred property incentives, net 351,733 364,382 367,511
Other liabilities 223,262 213,198 206,980
Shareholders' equity:
Common stock, no par value: 1,000,000 shares
authorized; 256,904, 269,549 and 269,690
shares issued and outstanding 791,678 685,934 663,810
Unearned stock compensation - (327) (438)
Retained earnings 1,171,364 1,404,366 1,277,674
Accumulated other comprehensive
(loss) earnings (1,437) 2,708 8,055
----------- ----------- -----------
Total shareholders' equity 1,961,605 2,092,681 1,949,101
----------- ----------- -----------
Total liabilities and shareholders' equity $4,708,382 $4,921,349 $4,789,533
=========== =========== ===========
</table>
<page>
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------------
(unaudited; amounts in thousands)
<table>
<caption>
Nine Months Nine Months
ended ended
10/28/06 10/29/05
----------- -----------
<s> <c> <c>
Operating Activities
Net earnings $445,658 $360,909
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of
buildings and equipment 205,816 204,496
Amortization of deferred property
incentives and other, net (25,255) (24,331)
Stock-based compensation expense 25,075 7,672
Deferred income taxes, net (49,755) 1,173
Tax benefit of stock-based payments 29,691 31,281
Excess tax benefit from stock-based payments (25,384) -
Provision for bad debt expense 10,715 18,327
Change in operating assets and liabilities:
Accounts receivable (38,652) (769)
Investment in asset backed securities 242,204 (86,786)
Merchandise inventories (235,623) (250,441)
Prepaid expenses (10,092) 855
Other assets (4,203) (6,079)
Accounts payable 213,294 190,601
Accrued salaries, wages and related benefits (34,861) (56,758)
Other current liabilities (22,559) (2,099)
Income taxes payable (38,647) (67,705)
Deferred property incentives 13,779 41,891
Other liabilities 11,328 14,209
----------- -----------
Net cash provided by operating activities 712,529 376,446
----------- -----------
Investing Activities
Capital expenditures (187,748) (205,015)
Purchases of short-term investments (109,550) (397,500)
Sales of short-term investments 163,550 405,325
Other, net (6,380) (6,404)
----------- -----------
Net cash used in investing activities (140,128) (203,594)
----------- -----------
Financing Activities
Proceeds from long-term borrowing 100,000 -
Principal payments on long-term debt (306,465) (99,769)
(Decrease) increase in cash book overdrafts (21,511) 4,720
Proceeds from exercise of stock options 38,917 61,057
Proceeds from employee stock purchase plan 16,300 15,600
Excess tax benefit from stock-based payments 25,384 -
Cash dividends paid (83,139) (64,236)
Repurchase of common stock (595,521) (246,302)
Other, net (307) 1,398
----------- -----------
Net cash used in financing activities (826,342) (327,532)
----------- -----------
Net decrease in cash and cash equivalents (253,941) (154,680)
Cash and cash equivalents at beginning of period 462,656 360,623
----------- -----------
Cash and cash equivalents at end of period $ 208,715 $205,943
=========== ===========
</table>