Nordstrom Reports Fourth Quarter Earnings Increase

SEATTLE, Feb 20, 2003 /PRNewswire-FirstCall via COMTEX/ -- Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $60.0 million, or $0.44 per diluted share, for the fourth quarter of 2002, which ended January 31, 2003. For the same period last year, net earnings and earnings per diluted share were $50.7 million and $0.38, respectively. The 18 percent improvement in fourth quarter earnings was primarily driven by increased sales and lower selling, general and administrative expense as a percentage of sales.

(Photo: http://www.newscom.com/cgi-bin/prnh/20001011/NORDLOGO )

Net sales for the fourth quarter of 2002 increased 7.3 percent, to $1.8 billion, compared to sales of $1.6 billion in the same period last year. On a calendar basis, fourth quarter 2002 same-store sales increased 1.9 percent.

For fiscal 2002, which consists of the twelve-month period ended January 31, 2003, net earnings and earnings per diluted share were $90.2 million and $0.66, respectively, compared to net earnings and earnings per diluted share of $124.7 million and $0.93 for the same period last year, a 28 percent decline. Excluding $71.0 million (net of tax) in non-recurring and impairment charges related to the cumulative effect of an accounting change, the purchase of a minority interest in Nordstrom.com and associated reintegration costs, and the write-down of an information technology investment(C), fiscal 2002 net earnings and earnings per diluted share were $161.3 million and $1.19, respectively. Higher-than-planned increases in same-store sales coupled with planned improvements in gross profit and selling, general and administrative expense, drove the 29 percent increase in earnings, excluding non-recurring and impairment charges.

Fiscal 2002 net sales of $6.0 billion increased 6.1 percent, compared to sales of $5.6 billion in the same period in 2001. On a calendar basis, fiscal 2002 same-store sales increased 1.4 percent.

The company said it made progress executing its 2002 key initiatives, which included driving sales increases, continuing to improve operational disciplines related to gross margin and selling, general and administrative expense, and completing the implementation of perpetual inventory. Progress towards these objectives included same-store sales increases for eight of the last nine months and modest improvements in both gross margin and expense levels, on a percentage of sales basis. In addition, all major elements of the perpetual inventory implementation were completed according to plan and under budget.

"We are proud of our people and the job that they did this past year," said President Blake Nordstrom. "We are also encouraged by the opportunities we see to continue to improve both performance and service to our customers."

During fiscal 2002 Nordstrom opened eight full-line stores, four Nordstrom Rack stores and one U.S. Faconnable boutique. Gross square footage for the year increased approximately 8.0 percent, from 17,048,000 to 18,428,000.

     2003 PERFORMANCE OUTLOOK:
     The Company is providing the following 2003 forecasts:

                               First Quarter 2003         Full-Year 2003

    Comp-store Sales                  Flat                  Flat to low
                                                       single-digit positive
    Gross Profit              Moderate improvement     Moderate improvement
    Selling, General and
     Administrative Expenses   Slight improvement       Slight improvement
    Service Charge Income     Increase $1-3 million   Increase $6-10 million
    Interest Expense                  Flat                     Flat
    Effective Tax Rate                 39%                      39%
    Earnings per Share            $0.23 - $0.27            $1.33 - $1.39
    Square footage growth                                       4%
Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 142 US stores located in 27 states. Founded in 1901 as a shoe store in Seattle, Nordstrom today operates 88 full-line stores, 47 Nordstrom Racks, five U.S. Faconnable boutiques, one freestanding shoe store, and one clearance store. Nordstrom also operates 23 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.

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


                                 NORDSTROM, INC.
                CONSOLIDATED STATEMENTS OF EARNINGS - 4th Quarter
     (unaudited;amounts in thousands, except per share data and percentages)

                              3 months     % of sales  3 months    % of sales
                                ended      (except as   ended      (except as
                               1/31/03     indicated)  1/31/02     indicated)

    Net sales(A)             $1,750,586       100.0  $1,631,090       100.0
    Cost of sales and
     related buying &
     occupancy              (1,168,963)      (66.8) (1,089,560)      (66.8)
    Gross profit                581,623        33.2     541,530        33.2
    Selling, general and
     administrative
     expenses                 (499,180)      (28.5)   (468,920)      (28.8)
    Operating income             82,443         4.7      72,610         4.4
    Interest expense, net      (21,435)       (1.2)    (18,321)       (1.1)
    Service charge income
    and other, net               37,326         2.1      29,050         1.8
    Earnings before
     income taxes                98,334         5.6      83,339         5.1
    Income tax expense         (38,300)   (38.9)(B)    (32,600)   (39.1)(B)
    Net earnings                $60,034         3.4     $50,739         3.1
    Earnings per share
      Basic                       $0.44                   $0.38
      Diluted                     $0.44                   $0.38


    ADDITIONAL DATA
    Average number of
     shares outstanding
      Basic                     135,438                 134,397
      Diluted                   135,838                 134,917

    2002 sales increase/(decrease)
     presented on a 4-5-4 basis
     (compared to prior-year period)                       3 months 3 months
                                                            ended     ended
                               Nov       Dec       Jan     1/31/03   1/31/02

    Total sales                4.3%      9.2%      6.7%      7.1%    (2.8%)
    Same-store sales
      Full-Line stores       (1.9%)      2.9%      0.5%      0.9%    (4.4%)
      Rack & other             9.3%      9.4%      2.9%      7.6%    (6.0%)
        Total                (1.0%)      3.4%      0.8%      1.5%    (4.6%)


    (A) Nordstrom reports quarterly financial results on a calendar basis.
        The Company reports monthly sales according to the 4-5-4 Retail
        Calendar.  Total sales for fourth quarter 2002 and 2001 were
        $1,729.3 million and $1,615.2 million, respectively, on a 4-5-4 Retail
        Calendar basis.
    (B) Percent of earnings before income taxes.


                                 NORDSTROM, INC.
                CONSOLIDATED STATEMENTS OF EARNINGS - Year-to-Date
     (unaudited;amounts in thousands, except per share data and percentages)

                              12 months    % of sales  12 months   % of sales
                                ended      (except as    ended     (except as
                               1/31/03     indicated)   1/31/02    indicated)
    Net sales(A)             $5,975,076       100.0  $5,634,130       100.0
    Cost of sales and
     related buying
     & occupancy            (3,971,372)      (66.5) (3,765,859)      (66.8)
    Gross profit              2,003,704        33.5   1,868,271        33.2
    Selling, general
     and administrative
     expenses               (1,813,968)      (30.3) (1,722,635)      (30.6)
    Operating income            189,736         3.2     145,636         2.6
    Interest expense, net      (81,921)       (1.4)    (75,038)       (1.4)
    Minority interest
     purchase and
     reintegration costs       (53,168)       (0.9)          --          --
    Service charge
     income and other, net      140,977         2.4     133,890         2.4
    Earnings before
     income taxes and
     cumulative effect of
     accounting change          195,624         3.3     204,488         3.6

    Income tax expense         (92,041)   (47.0)(B)    (79,800)   (39.0)(B)
    Earnings before
     cumulative effect
     of accounting change       103,583         1.7     124,688         2.2
    Cumulative effect of
     accounting change
     (net of $8,541 tax)       (13,359)       (0.2)          --          --
    Net earnings                $90,224         1.5    $124,688         2.2
    Earnings per share
      Basic                       $0.67                   $0.93
      Diluted                     $0.66                   $0.93

      Diluted earnings per
       share excluding
       non-recurring charges
       and accounting change   $1.19(C)                   $0.93

    ADDITIONAL DATA
    Average number of shares
     outstanding
      Basic                     135,107                 134,105
      Diluted                   135,724                 134,339

    2002 sales increase/(decrease)
     presented on a 4-5-4 basis
     (compared to prior-year period)                    12 months   12 months
                                                          ended       ended
                                                         1/31/03     1/31/02

    Total sales                                            6.1%        1.9%
    Same-store sales
      Full-Line stores                                     0.7%      (2.6%)
      Rack & other                                         7.4%      (6.0%)
        Total                                              1.3%      (2.9%)


    (A) Nordstrom reports year-to-date financial results on a calendar basis.
        The Company reports monthly sales according to the 4-5-4 Retail
        Calendar.  Total sales for year-to-date 2002 and 2001 were
        $5,966.5 million and $5,622.6 million, respectively, on a 4-5-4 Retail
        Calendar basis.
    (B) Percent of earnings before income taxes.  For year-to-date 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 for certain costs related to the minority
        interest purchase.
    (C) 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), the minority interest purchase and
        reintegration costs of $48,184 (net of tax), and the write-down of an
        IT investment in a supply chain tool of $9,498 (net of tax).
SOURCE Nordstrom, Inc.

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