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Exhibit 99.1
NORDSTROM
For release: May 14, 2009 at 1:05 p.m. PT
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NORDSTROM REPORTS FIRST QUARTER 2009 EARNINGS
SEATTLE, Wash. - 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 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.
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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
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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.
Investor Contact: Media Contact:
Rob Campbell Brooke White
Nordstrom, Inc. Nordstrom, Inc.
(206) 303-3290 (206) 373-3030
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NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - 1st Quarter
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(unaudited; amounts in millions,
except per share data)
<table>
<caption>
Quarter Quarter
ended ended
5/2/09 5/3/08
---------- ----------
<s> <c> <c>
Net sales $ 1,706 $ 1,879
Credit card revenues 86 70
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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)
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Earnings before interest and income taxes 146 227
Interest expense, net (31) (31)
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Earnings before income taxes 115 196
Income tax expense (34) (77)
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Net earnings $ 81 $ 119
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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
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NORDSTROM, INC.
CONSOLIDATED BALANCE SHEETS
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(unaudited; amounts in millions)
<table>
<caption>
5/2/09 5/3/08
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<s> <c> <c>
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
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Total current assets 3,293 3,260
Land, buildings and equipment, net 2,231 2,061
Goodwill 53 53
Other assets 183 212
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Total assets $ 5,760 $ 5,586
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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
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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)
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Total shareholders' equity 1,274 1,058
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Total liabilities and shareholders' equity $ 5,760 $ 5,586
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NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(unaudited; amounts in millions)
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Quarter Quarter
ended ended
5/2/09 5/3/08
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<s> <c> <c>
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
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Net cash provided by operating activities 205 153
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Investing Activities
Capital expenditures (102) (142)
Change in accounts receivable originated at third
parties (30) (42)
Other, net - (1)
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Net cash used in investing activities (132) (185)
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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)
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Net cash used in financing activities (67) (207)
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Net increase (decrease) in cash and cash equivalents 6 (239)
Cash and cash equivalents at beginning of period 72 358
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Cash and cash equivalents at end of period $ 78 $ 119
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NORDSTROM, INC.
STATEMENTS OF EARNINGS BY SEGMENT - 1st Quarter
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(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:
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Quarter ended 5/2/09 Quarter ended 5/3/08
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Amount % of sales(1) Amount % of sales(1)
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<s> <c> <c> <c> <c>
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%)
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Gross profit 611 35.8% 709 37.8%
Selling, general and administrative
expenses (447) (26.2%) (493) (26.2%)
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Earnings before interest and income
taxes 164 9.6% 216 11.5%
Interest expense, net (21) (1.2%) (18) (1.0%)
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Earnings before income taxes $ 143 8.4% $ 198 10.5%
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(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:
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<caption>
Quarter Quarter
ended ended
5/2/09 5/3/08
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<s> <c> <c>
Credit card revenues $ 86 $ 70
Interest expense (10) (13)
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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)
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Earnings before income taxes $ (28) $ (2)
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