Nordstrom Reports First Quarter Earnings

SEATTLE, May 19 /PRNewswire-FirstCall/ -- Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $27.2 million, or $0.20 per diluted share, for the first quarter of 2003, which ended May 3, 2003. For the same period last year, net loss and loss per diluted share were $24.6 million and $0.18, respectively. Excluding $55.0 million (net of tax) in non-recurring and impairment charges related to the cumulative effect of an accounting change and the purchase of a minority interest in and associated reintegration costs(1), first quarter 2002 net earnings and earnings per diluted share were $30.4 million and $0.22, respectively. Below plan sales and higher than expected markdowns drove the 10.8 percent decrease in earnings for the quarter, excluding non-recurring and impairment charges.

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Net sales for the first quarter of 2003 increased 3.5 percent, to $1.3 billion, compared to sales of $1.2 billion in the same period last year. First quarter 2003 same-store sales decreased 1.4 percent.

"Despite the challenging retail environment, we are encouraged by our relative sales performance this past quarter and are working diligently to continue to build market share," commented President Blake Nordstrom. "We remain focused on our core initiatives of achieving sustained same-store sales increases through service and merchandise, integrating new technology and reducing expenses, as these are the key drivers of future performance improvement."

Expansion Update

During the first quarter of 2003 Nordstrom opened one full-line store, in Houston, TX. For the remainder of the year ending January 31, 2004, the company plans to open three full-line stores, in Austin, Texas; Richmond, Va.; and Wellington Green, Fla. Two additional Rack stores are also planned. Gross square footage for the year is expected to increase approximately 4.0 percent, from 18,428,000 to 19,089,000.

GAAP Sales Performance

The additional information we are providing in this section is to comply with the Securities and Exchange Commission's newly issued Regulation G. The company converted to a 4-5-4 Retail Calendar at the beginning of 2003. Sales performance numbers included in this press release have been calculated on a comparative 4-5-4 basis. The company believes that adjusting out these three additional days provides a more comparable basis (4-5-4 vs 4-5-4) from which to evaluate sales performance in the first quarter.

     Sales            1Q03          1Q02        Dollar      Total      Comp
     Reconciliation   4-5-4      Gregorian
     ($M)            calendar     calendar     Increase     Sales      Sales

     Number of
      Days Reported
      GAAP              92             89
      GAAP Sales  $1,343.5       $1,245.8      $97.7         7.8%       2.7%
      Feb 1-2,
      2002 sales                  ($31.0)
      May 1-4,
      2002 sales                    $65.6
      Less Feb 1,
       2003 sales  ($18.2)
       sales      $1,325.3       $1,280.4      $44.9         3.5%     (1.4%)
      Adjusted Days     91             91

     2003 Outlook
     The Company is providing the following 2003 forecasts:

                                        2nd Quarter 2003       Full-Year 2003

     Comp-store Sales                           Flat                   Flat
     Gross Profit (%)                           Flat                   Flat
     Selling, General and
      Administrative Expense (%)     Slightly higher                   Flat
     Service Charge Income                      Flat   Increase $6-10 million
     Interest Expense                           Flat                   Flat
     Effective Tax Rate                          39%                    39%
     Earnings per Share                $0.35 - $0.40 $1.19 - $1.23
     Square footage growth                                               4%

    Conference Call Information:

Company management will be hosting a conference call and webcast to discuss first quarter results at 4:30pm (EDT) 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 888-568-0719. Interested parties may also access the call over the Internet by visiting the Investor Relations section of the company's corporate website at . 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 143 US stores located in 27 states. Founded in 1901 as a shoe store in Seattle, Nordstrom today operates 89 full-line stores, 47 Nordstrom Racks, five U.S. Faconnable boutiques, one freestanding shoe store, and one clearance store. Nordstrom also operates 24 international Faconnable boutiques, primarily in Europe. Additionally, Nordstrom Direct serves customers through its online presence at 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.

CONTACT: investors, Stephanie Allen, +1-206-303-3262, or media, Shasha Richardson, +1-206-373-3038, both of Nordstrom, Inc.

    (unaudited;amounts in thousands, except per share data and percentages)

                          Quarter      % of sales    Quarter       % of sales
                           ended       (except as     ended        (except as
                          5/3/03       indicated)    4/30/02       indicated)

    Net sales           $1,343,539         100.0   $1,245,761         100.0

    Cost of sales and
     related buying
     & occupancy         (888,458)        (66.1)    (823,088)        (66.1)

    Gross profit           455,081          33.9      422,673          33.9

    Selling, general
     and administrative
     expenses            (426,030)        (31.7)    (386,084)        (31.0)

    Operating income        29,051           2.2       36,589           2.9

    Interest expense,
     net                  (20,228)         (1.5)     (20,049)         (1.6)

    Minority interest
     purchase                   --            --     (42,047)         (3.4)
    Service charge income
    and other, net          35,632           2.6       33,304           2.7

    Earnings before
     income taxes and cumulative
    effect of accounting
     change                 44,455           3.3        7,797           0.6

    Income tax expense    (17,300)     (38.9)(2)     (19,010)    (243.8)(2)
    Earnings (loss)
     before cumulative
     effect of
    accounting change       27,155           2.0     (11,213)         (0.9)
    Cumulative effect
     of accounting
     change (net of tax)        --            --     (13,359)         (1.1)

    Net earnings (loss)    $27,155           2.0    $(24,572)         (2.0)

    Earnings (loss)
     per share
     Basic                   $0.20       $(0.18)
     Diluted                 $0.20       $(0.18)

    Average number of shares outstanding
    Basic                  135,578       134,702
    Diluted                135,798       134,702

    (1) Net earnings excluding non-recurring and impairment charges is the sum
        of net loss of $24,572, the cumulative effect of accounting change of
        $13,359 (net of tax) and the minority interest purchase and
        reintegration costs of $41,657 (net of tax).

    (2) Percent of earnings before income taxes.  For first quarter 2002,
        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.
    -0-                             05/19/2003
    /CONTACT:  investors, Stephanie Allen, +1-206-303-3262, or media, Shasha
Richardson, +1-206-373-3038, both of Nordstrom, Inc./
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                  PRN Photo Desk, 1-888-776-6555 or +1-212-782-2840/
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CO:  Nordstrom, Inc.
ST:  Washington

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8283 05/19/2003 16:06 EDT