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Exhibit 99.1
For Immediate Release
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February 25, 2008
NORDSTROM REPORTS FOURTH QUARTER RESULTS
SEATTLE - February 25, 2008 - Nordstrom, Inc. (NYSE: JWN) today reported
net earnings of $212 million, or $0.92 per diluted share for the fourth
quarter ended February 2, 2008. For the fourth quarter last year, net earnings
and earnings per diluted share were $232 million and $0.89, respectively.
Total sales in the fourth quarter were $2.5 billion, a decrease of 4.4 percent
compared to sales of $2.6 billion for the same period in fiscal 2006. Fourth
quarter same-store sales decreased 0.7 percent.
Similar to many other retailers, Nordstrom follows the retail 4-5-4
reporting calendar, which included an extra week in the fourth quarter of
fiscal 2006 (the 53rd week) compared to the normal operating calendar of 52
weeks. Excluding the extra week of sales in the fourth quarter of 2006, total
sales were approximately flat in the fourth quarter of 2007. The 53rd week is
not included in same-store sales calculations.
FOURTH QUARTER HIGHLIGHTS
The fourth quarter presented a challenging consumer and retail
environment, but the company continued to make good progress aligning
inventory and expenses to sales trends. The company continues to focus on
profitably growing market share by providing customers with a compelling
selection of designer, luxury, and quality fashion merchandise. As always,
Nordstrom is dedicated to offering friendly, knowledgeable, welcoming service,
with a consistent offering and experience across its retail stores and online
channel at Nordstrom.com.
-Same-store sales decreased 0.7 percent for the quarter compared to the
company's approximately flat same-store sales plan. Merchandise categories
with performance above the same-store average for the quarter were designer
products across categories, accessories, and women's shoes.
-Gross profit, as a percent of sales, decreased 66 basis points compared
to last year's fourth quarter. Merchandise margins declined over prior year
as the company continued to align inventory with sales trends. Year end
inventory per square foot was $47, down from $49 in the prior year. The
decline in merchandise margin rate was partially offset by lower performance
based buying costs.
-Selling, general and administrative expenses, as a percent to sales,
improved 68 basis points compared to last year's fourth quarter primarily due
to lower incentive costs tied to company performance, partially offset by
increased bad debt expense related to our credit card business.
-In the fourth quarter of 2007, Nordstrom repurchased 11 million shares
totaling $388 million, with an average price of $34.38. The company had $1.4
billion remaining on its existing authorization. Fourth quarter share
repurchases had a $0.01 impact on fourth quarter earnings per diluted share.
The cumulative impact year to date of the company's share repurchase program
added $0.06 to fourth quarter 2007 earnings per diluted share.
FULL YEAR RESULTS
For the fiscal year ended February 2, 2008, net earnings increased 5.5
percent to $715 million compared to net earnings of $678 million last year.
Earnings per diluted share for the same periods were $2.88 and $2.55,
respectively. Full year results include a gain of $20.9 million, net of tax,
or $0.09 per diluted share, for the sale of the Faconnable business, which
closed during the third quarter.
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Total sales for the year increased 3.1 percent to $8.8 billion compared
to prior year sales of $8.6 billion. As noted previously, fiscal 2006 included
a 53rd week of sales totaling $117.7 million. Excluding the extra week of
sales in fiscal 2006, total sales increased 4.6 percent in fiscal year 2007.
For the year, same-store sales increased 3.9 percent. As noted previously,
same-store sales calculations do not include the 53rd week.
EXPANSION UPDATE
Nordstrom opened a new 165,000-square-foot full-line store at Aventura
Mall in Aventura, Fla., on February 15, 2008.
In 2008, Nordstrom plans to open seven additional new full-line stores:
-On March 7, a 210,000-square-foot store at the Ala Moana Center in
Honolulu, Hawaii;
-On March 28, a 138,000-square-foot store at the Burlington Mall in
Burlington, Mass.;
-On April 18, a 118,000-square-foot store at The Mall at Partridge
Creek in Clinton Township, Mich.;
-On September 5, a 138,000-square-foot store at The Oaks Shopping
Center in Thousand Oaks, Calif.;
-On September 19, a 127,000-square-foot store at the Fashion Mall at
Keystone in Indianapolis, Ind.;
-On October 24, a 138,000-square-foot store at the Ross Park Mall in
Pittsburgh, Pa.;
-On November 7, a 77,000-square-foot store at the Waterside Shops in
Naples, Fla.
On October 3, 2008, Nordstrom plans to open the newly relocated full-line
store at the Tacoma Mall in Tacoma, Wash. In the fall of 2008, Nordstrom also
plans to open two new Rack stores at the Springbrook Prairie Pavilion in
Naperville, Ill., and the Laguna Hills Mall in Laguna Hills, Calif.
QUARTERLY DIVIDEND
As announced on February 20, 2008, the Nordstrom board of directors
declared a quarterly dividend increase from $0.135 per share to $0.16 per
share, payable on March 14, 2008, to shareholders of record on February 29,
2008.
2008 OUTLOOK
The company is providing the following 2008 forecast:
Fiscal 2008
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Same-store Sales flat to a 2% decrease
Gross Profit (%) 30 to 60 basis point decrease
Selling, General and Admin. Expense (%) 60 to 80 basis point increase
Interest Expense, net $55 to $60 million increase
Finance Charges and Other, net $50 to $60 million increase
Effective Tax Rate 38.7%
Earnings per Diluted Share $2.75 to $2.90
Diluted Shares Outstanding 228 million
For the first quarter of 2008, the company expects a decline of 3
percent to 5 percent in same-store sales. Earnings per diluted share for the
first quarter are expected in the range of $0.49 to $0.54.
CONFERENCE CALL INFORMATION:
Company management will be hosting a conference call and webcast to discuss
fourth quarter results at 4:30 p.m. (ET) today. To participate, please dial 1-
888-323-7915 ten minutes prior to the call (passcode: NORD). A telephone
replay will be available by dialing 1-800-294-3089 beginning approximately one
hour after the conclusion of the call until 3:59 a.m. (ET) on March 25, 2008.
Interested parties may also access the call in listen-only mode over the
Internet by visiting the Investor Relations section of the company's corporate
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Web site at www.nordstrom.com. An archived version of the webcast will be
available at this location until March 24, 2008.
Nordstrom, Inc. is one of the nation's leading fashion specialty retailers,
with 157 US stores located in 28 states. Founded in 1901 as a shoe store in
Seattle, today Nordstrom operates 102 full-line stores, 50 Nordstrom Racks,
two Jeffrey boutiques, one free-standing shoe store, and two clearance stores.
In addition, Nordstrom serves customers through its online presence at
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
involves risks and uncertainties, including anticipated results for the fiscal
year ending January 31, 2009 and its first quarter, anticipated quarterly and
annual same-store sales rate, planned store openings, the timing and amounts
of share repurchases, 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, our ability
to respond to the business environment and fashion trends, effective inventory
management, the impact of economic and competitive market forces, successful
execution of our store growth strategy including the timely completion of
construction associated with newly planned stores, relocations, and remodels,
our 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 our multi-channel strategy, our ability
to safeguard our brand and reputation, efficient and proper allocation of our
capital resources, successful execution of our technology strategy, the impact
of terrorist activity or war on our customers and the retail industry, trends
in personal bankruptcies and bad debt write-offs, changes in interest rates,
our ability to maintain our relationships with our employees, our ability to
control costs, weather conditions and hazards of nature that affect consumer
traffic and consumers' purchasing patterns, and the timing and amounts of
share repurchases by the company. Our SEC reports, including our Form 10-K for
the fiscal year ended February 3, 2007, and our Form 10-K for the fiscal year
ended February 2, 2008, to be filed with the SEC on or about March 21, 2008,
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:
Chris Holloway, 206-303-3290 Michael Boyd, 206-373-3038
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NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - 4th Quarter
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(unaudited; amounts in millions,
except per share data and percentages)
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<caption>
Quarter % of sales(1) Quarter % of sales(1)
ended (except as ended (except as
2/2/08 indicated) 2/3/07 indicated)
---------- ---------- ---------- ---------
<s> <c> <c> <c> <c>
Net sales $ 2,514 100.0% $ 2,631 100.0%
Cost of sales and related buying
& occupancy costs (1,569) (62.4%) (1,624) (61.7%)
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Gross profit 945 37.6% 1,007 38.3%
Selling, general and administrative
expenses (637) (25.4%) (685) (26.0%)
Finance charges and other, net 76 3.0% 65 2.5%
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Earnings before interest expense,
net and income tax expense 384 15.3% 387 14.7%
Interest expense, net (30) (1.2%) (8) (0.3%)
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Earnings before income tax expense 354 14.1% 379 14.4%
Income tax expense (142) (40.2%)(2) (147) (38.7%)(2)
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Net earnings $ 212 8.4% $ 232 8.8%
Earnings per share
Basic $0.93 $0.90
Diluted $0.92 $0.89
ADDITIONAL DATA
Weighted average shares outstanding
Basic 229 257
Diluted 232 262
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(1)Subtotals and totals may not foot due to rounding.
(2)Percent of earnings before income taxes.
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NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - Fiscal Year
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(unaudited; amounts in millions,
except per share data and percentages)
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Year % of sales(1) Year % of sales(1)
ended (except as ended (except as
2/2/08 indicated) 2/3/07 indicated)
---------- ---------- ---------- ---------
<s> <c> <c> <c> <c>
Net sales $ 8,828 100.0% $ 8,561 100.0%
Cost of sales and related buying
& occupancy costs (5,526) (62.6%) (5,354) (62.5%)
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Gross profit 3,302 37.4% 3,207 37.5%
Selling, general and administrative
expenses (2,360) (26.7%) (2,297) (26.8%)
Gain on sale of Faconnable 34 0.4% - -
Finance charges and other, net 271 3.1% 239 2.8%
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Earnings before interest expense,
net and income tax expense 1,247 14.1% 1,149 13.4%
Interest expense, net (74) (0.8%) (43) (0.5%)
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Earnings before income tax expense 1,173 13.3% 1,106 12.9%
Income tax expense (458) (39.0%)(2) (428) (38.7%)(2)
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Net earnings $ 715 8.1% $ 678 7.9%
Earnings per share
Basic $2.92 $2.60
Diluted $2.88 $2.55
ADDITIONAL DATA
Weighted average shares outstanding
Basic 245 261
Diluted 249 266
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(1)Subtotals and totals may not foot due to rounding.
(2)Percent of earnings before income taxes.
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NORDSTROM, INC.
CONSOLIDATED BALANCE SHEETS
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(unaudited; amounts in millions)
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<caption>
2/2/08 2/3/07
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<s> <c> <c>
Assets
Current assets:
Cash and cash equivalents $ 358 $ 403
Accounts receivable, net 1,788 684
Investment in asset backed securities - 428
Merchandise inventories 956 997
Current deferred tax assets, net 181 169
Prepaid expenses and other 78 61
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Total current assets 3,361 2,742
Land, buildings and equipment, net 1,983 1,757
Goodwill 53 52
Acquired tradename - 84
Other assets 203 187
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Total assets $ 5,600 $ 4,822
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 556 $ 577
Accrued salaries, wages and related benefits 268 340
Other current liabilities 492 433
Income taxes payable 58 76
Current portion of long-term debt 261 7
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Total current liabilities 1,635 1,433
Long-term debt, net 2,236 624
Deferred property incentives, net 369 356
Other liabilities 245 240
Commitments and contingent liabilities
Shareholders' equity:
Common stock, no par value: 1,000 shares
authorized; 221 and 257 shares
issued and outstanding 936 827
Retained earnings 201 1,351
Accumulated other comprehensive loss (22) (9)
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Total shareholders' equity 1,115 2,169
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Total liabilities and shareholders' equity $ 5,600 $ 4,822
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NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(unaudited; amounts in millions)
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<caption>
Year ended Year ended
2/2/08 2/3/07
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<s> <c> <c>
Operating Activities
Net earnings $ 715 $ 678
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization of buildings
and equipment 269 285
Gain on sale of Faconnable (34) -
Amortization of deferred property incentives
and other, net (36) (36)
Stock-based compensation expense 26 37
Deferred income taxes, net (42) (58)
Tax benefit of stock-based payments 28 44
Excess tax benefit from stock-based payments (26) (38)
Provision for bad debt expense 107 17
Change in operating assets and liabilities:
Accounts receivable (1,234) (61)
Investment in asset backed securities 420 128
Merchandise inventories - (39)
Prepaid expenses (9) (5)
Other assets (27) (8)
Accounts payable (19) 84
Accrued salaries, wages and related benefits (64) 49
Other current liabilities 36 23
Income taxes payable (6) (6)
Deferred property incentives 58 31
Other liabilities (1) 17
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Net cash provided by operating activities 161 1,142
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Investing Activities
Capital expenditures (501) (264)
Proceeds from sale of Faconnable 216 -
Proceeds from sale of assets 12 -
Purchases of short-term investments - (110)
Sales of short-term investments - 164
Other, net 3 (8)
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Net cash used in investing activities (270) (218)
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Financing Activities
Proceeds from long-term borrowings, net 2,510 -
Principal payments on long-term borrowings (680) (307)
Increase (decrease) in cash book overdrafts 5 (51)
Proceeds from exercise of stock options 34 51
Proceeds from employee stock purchase plan 17 16
Excess tax benefit from stock-based payments 26 38
Cash dividends paid (134) (110)
Repurchase of common stock (1,702) (621)
Other, net (12) 0
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Net cash provided by (used in) financing activities 64 (984)
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Net decrease in cash and cash equivalents (45) (60)
Cash and cash equivalents at beginning of year 403 463
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Cash and cash equivalents at end of year $ 358 $ 403
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