Nordstrom Fourth Quarter Earnings Increase 74 Percent
SEATTLE, Feb 19, 2004 /PRNewswire-FirstCall via COMTEX/ -- 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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001011/NORDLOGO )
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.
On a comparable 4-5-4 basis, 2003 total sales of $6.5 billion increased 8.6 percent from the same period in 2002. Full year same-store sales increased 4.3 percent.
GAAP SALES PERFORMANCE
The additional information provided in this section is to comply with the Securities and Exchange Commission's Regulation G. The Company converted to a 4-5-4 Retail Calendar at the beginning of 2003. This change in the fiscal calendar has resulted in differences in the number of days included in the current period versus the same period in the prior year. Sales performance numbers included in this sales release have been calculated on a comparative 4-5-4 basis. The Company believes that adjusting for these differences provides a more comparable basis (4-5-4 vs. 4-5-4) from which to evaluate sales performance. The following reconciliation bridges 2002 GAAP sales to the 4-5-4 comparable sales.
%Change %Change
Sales Reconciliation QTD QTD Dollar Total Comp
($M) 2003 2002 Increase Sales Sales
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 $207.4 12.0% 8.5%
4-5-4 Adjusted Days 91 91
%Change %Change
Sales Reconciliation Dollar Total Comp
($M) FY 2003 FY 2002 Increase Sales Sales
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
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:
1st Quarter 2004 Full-Year 2004
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
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.
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)
Quarter %of sales Quarter %of sales
ended (except as ended (except as
1/31/04 indicated) 1/31/03 indicated)
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
ADDITIONAL DATA
Average number of
shares outstanding
Basic 137,599 135,438
Diluted 140,690 135,838
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - Full Year
(unaudited; amounts in thousands, except per share data and percentages)
Year-to-Date %of sales Year-to-Date %of sales
ended (except as ended (except as
1/31/04 indicated) 1/31/03 indicated)
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
ADDITIONAL DATA
Average number of
shares outstanding
Basic 136,329 135,107
Diluted 137,739 135,724
Investor Contact: Media Contact:
Stephanie Allen, 206-303-3262 Shasha Richardson, 206-373-3038
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.
SOURCE Nordstrom, Inc.
CONTACT:
investors, Stephanie Allen,
+1-206-303-3262, or
media,
Shasha Richardson,
+1-206-373-3038,
both of Nordstrom, Inc.