Nordstrom Reports First Quarter Earnings Per Share of 48 Cents
SEATTLE, May 18 /PRNewswire-FirstCall/ -- Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $131.2 million, or $0.48 per diluted share, for the first quarter ended April 29, 2006. For the same period last year, net earnings and earnings per diluted share were $104.5 million and $0.38, respectively.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001011/NORDLOGO )
Total sales for the first quarter of 2006 increased 8.0 percent to $1.8 billion, compared to sales of $1.7 billion in the same period last year. First quarter same-store sales increased 5.4 percent.
FIRST QUARTER HIGHLIGHTS
Net earnings increased 25.5 percent in the first quarter compared to the same quarter last year, reflecting continued progress in merchandise execution, inventory management and expense control. The company remains committed to providing a superior shopping experience and achieving long-term profitable growth.
-- Same-store sales increased 5.4 percent for the quarter, higher than the
company's one to three percent same-store sales guidance. Merchandise
divisions with performance above the company's average were
accessories, cosmetics and men's apparel.
-- Gross profit, as a percent of sales, increased 40 basis points. Better
than plan sales resulted in incremental leverage on buying and
occupancy expenses, while overall merchandise margin remained flat
versus last year.
-- The same-store sales increase combined with expense control resulted in
a 48 basis point reduction in selling, general and administrative
expenses on a percent to sales basis. For the quarter, fixed expenses
were maintained at or below budgeted levels.
-- We adopted SFAS No. 123(R), "Share-Based Payment," and as a result we
recorded compensation expense of $2.7 million in buying and occupancy
costs and $4.4 million in selling, general and administrative expenses.
EXPANSION UPDATE
During the first quarter Nordstrom opened one full-line store in Palm Beach Gardens, Florida at the Gardens Mall on March 10th.
SHARE REPURCHASE
Nordstrom repurchased approximately 5.3 million shares of its common stock during the first quarter for $212.9 million. This reduction in weighted- average shares outstanding had no material impact on diluted earnings per share for the quarter.
QUARTERLY DIVIDEND
The company's board of directors has approved a quarterly dividend of $0.105 per share, payable on June 15, 2006, to shareholders of record on May 31, 2006.
2006 OUTLOOK
For the fiscal year ending February 3, 2007, the company anticipates diluted earnings per share in the range of $2.24 to $2.32, which includes an estimated expense of $0.06 per diluted share from the adoption of SFAS No. 123(R) regarding expensing of stock options. For the second quarter, the company expects low single digit same-store sales growth and earnings per share in the range of $0.59 to $0.64.
CONFERENCE CALL INFORMATION:
Company management will be hosting a conference call and webcast to discuss first quarter results at 4:15 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 866-463-4967. 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 156 US stores located in 27 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 99 full-line stores, 49 Nordstrom Racks, five Faconnable boutiques, one free-standing shoe store, and two clearance stores. Nordstrom also operates 34 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.
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 second 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 April 29, 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.
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - 1st Quarter
(unaudited; amounts in thousands, except per share data and percentages)
Quarter % of sales(1) Quarter % of sales(1)
ended (except as ended (except as
4/29/06 indicated) 4/30/05 indicated)
Net sales $1,787,223 100.0% $1,654,474 100.0%
Cost of sales and
related buying &
occupancy costs (1,123,003) (62.8%) (1,046,165) (63.2%)
Gross profit 664,220 37.2% 608,309 36.8%
Selling, general and
administrative
expenses (494,220) (27.7%) (465,422) (28.1%)
Operating income 170,000 9.5% 142,887 8.6%
Interest expense, net (10,751) (0.6%) (12,639) (0.8%)
Other income including
finance charges, net 53,838 3.0% 42,732 2.6%
Earnings before income
tax expense 213,087 11.9% 172,980 10.5%
Income tax expense (81,856) (38.4%)(2) (68,442) (39.6%)(2)
Net earnings $131,231 7.3% $104,538 6.3%
Earnings per share
Basic $0.49 $0.38
Diluted $0.48 $0.38
ADDITIONAL DATA
Weighted average shares
outstanding
Basic 267,490 273,070
Diluted 272,831 278,395
(1) Subtotals and totals may not foot due to rounding.
(2) Percent of earnings before income taxes.
NORDSTROM, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited; amounts in thousands)
4/29/06 1/28/06 4/30/05
Assets
Current assets:
Cash and cash equivalents $261,326 $462,656 $315,695
Short-term investments 30,000 54,000 53,750
Accounts receivable, net 619,095 639,558 629,788
Investment in asset backed securities 565,854 561,136 427,302
Merchandise inventories 1,078,750 955,978 1,016,640
Current deferred tax assets 161,001 145,470 114,127
Prepaid expenses and other 56,982 55,359 53,934
Total current assets 2,773,008 2,874,157 2,611,236
Land, buildings and equipment, net 1,748,399 1,773,871 1,763,766
Goodwill 51,714 51,714 51,714
Acquired tradename 84,000 84,000 84,000
Other assets 129,518 137,607 108,891
Total assets $4,786,639 $4,921,349 $4,619,607
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $638,983 $540,019 $582,381
Accrued salaries, wages and related
benefits 174,300 285,982 172,167
Other current liabilities 372,446 409,076 336,246
Income taxes payable 59,978 81,617 45,181
Current portion of long-term debt 306,636 306,618 100,458
Total current liabilities 1,552,343 1,623,312 1,236,433
Long-term debt, net 624,949 627,776 928,175
Deferred property incentives, net 361,446 364,382 357,694
Other liabilities 219,477 213,198 204,353
Shareholders' equity:
Common stock, no par value: 1,000,000
shares authorized; 265,741,
269,549 and 273,265 shares issued
and outstanding 733,663 685,934 619,640
Unearned stock compensation -- (327) (593)
Retained earnings 1,294,351 1,404,366 1,266,337
Accumulated other comprehensive
earnings 410 2,708 7,568
Total shareholders' equity 2,028,424 2,092,681 1,892,952
Total liabilities and shareholders'
equity $4,786,639 $4,921,349 $4,619,607
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; amounts in thousands)
Quarter Quarter
Ended Ended
4/29/06 4/30/05
Operating Activities
Net earnings $131,231 $104,538
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of buildings and
equipment 70,425 69,204
Amortization of deferred property incentives and
other, net (8,677) (6,903)
Stock-based compensation expense 7,336 1,428
Deferred income taxes, net (7,395) 19,610
Tax benefit of stock option exercises and employee
stock purchases 13,538 16,546
Excess tax benefits from stock-based payments (11,617) --
Provision for bad debt 2,650 5,118
Change in operating assets and liabilities:
Accounts receivable 17,834 10,578
Investment in asset backed securities (7,927) (9,210)
Merchandise inventories (109,648) (99,065)
Prepaid expenses (1,410) 666
Other assets (572) 409
Accounts payable 91,905 97,507
Accrued salaries, wages and related benefits (111,343) (118,548)
Other current liabilities (34,126) (20,781)
Income taxes payable (21,639) (46,971)
Property incentives 3,826 9,839
Other liabilities 4,360 7,237
Net cash provided by operating activities 28,751 41,202
Investing Activities
Capital expenditures (47,513) (53,021)
Proceeds from sale of assets 18 --
Purchases of short-term investments (100,000) (165,500)
Sales of short-term investments 124,000 153,575
Other, net (1,941) (691)
Net cash used in investing activities (25,436) (65,637)
Financing Activities
Principal payments on long-term debt (1,124) (1,021)
Decrease in cash book overdrafts (1,807) (3,756)
Proceeds from exercise of stock options 18,657 39,139
Proceeds from employee stock purchase plan 8,370 8,640
Excess tax benefits from stock-based payments 11,617 --
Cash dividends paid (28,326) (17,758)
Repurchase of common stock (212,920) (47,746)
Other, net 888 2,009
Net cash used in financing activities (204,645) (20,493)
Net decrease in cash and cash equivalents (201,330) (44,928)
Cash and cash equivalents at beginning of period 462,656 360,623
Cash and cash equivalents at end of period $261,326 $315,695
SOURCE
Nordstrom, Inc.
05/18/2006
CONTACT:
Investors:
RJ Jones,
1-206-303-3007,
or
Media:
Deniz Anders,
1-206-373-3038,
both for Nordstrom, Inc.