Nordstrom Third Quarter Earnings Increase 147 Percent
SEATTLE, Nov. 20 /PRNewswire-FirstCall/ -- Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $45.5 million, or $0.33 per diluted share, for the third quarter of 2003, which ended November 1, 2003. For the same period last year, net earnings and earnings per diluted share were $18.4 million and $0.14, respectively.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001011/NORDLOGO )
On a comparable 4-5-4 basis, net sales for the third quarter of 2003 increased 9.8 percent, to $1.4 billion, compared to sales of $1.3 billion in the same period last year. Third quarter 2003 same-store sales increased 5.0 percent.
THIRD QUARTER HIGHLIGHTS
Earnings increased 147 percent in the third quarter compared to the same quarter last year, as the company continues to focus on improving merchandising assortments, inventory productivity and expense management. The better-than-expected performance reflected continued operating improvements consistent with the company's key strategic initiatives.
-- Same-store sales increased 5.0 percent, better than the company's plan
of a low single digit increase.
-- Gross profit improved due to a combination of strong sales and lower-
than-plan markdowns.
-- Selling, general and administrative expense dollars were as expected
for the quarter; sales leverage resulted in significant expense rate
improvement.
YEAR-TO-DATE RESULTS
Year-to-date net earnings and earnings per share for the period ended November 1, 2003, were $138.5 million and $1.01, respectively, compared to net earnings and earnings per share of $30.2 million and $0.22 for the same period in 2002. Excluding $71.0 million (net of tax) in non-recurring and impairment charges(1), year-to-date 2002 net earnings and earnings per diluted share were $101.2 million and $0.75, respectively.
On a comparable 4-5-4 basis, year-to-date net sales of $4.5 billion increased 7.2 percent from the same period in 2002. Year-to-date same store sales increased 2.6 percent.
GAAP SALES PERFORMANCE
The additional information provided in this section is to comply with the Securities and Exchange Commission's Regulation G. The Company converted to a 4-5-4 Retail Calendar at the beginning of 2003. This change in the fiscal calendar has resulted in differences in the number of days included in the current period versus the same period in the prior year. Sales performance numbers included in this release have been calculated on a comparative 4-5-4 basis. The Company believes that adjusting for these differences provides a more comparable basis (4-5-4 vs. 4-5-4) from which to evaluate sales performance. The following reconciliation bridges 2002 GAAP sales to the 4-5- 4 comparable sales.
% Change % Change
QTD QTD Dollar Total Comp
Sales Reconciliation ($M) 2003 2002 Increase Sales Sales
Number of Days GAAP 91 92
GAAP Sales $1,420.6 $1,323.2 $97.4 7.4% 2.5%
Less Aug. 1-3, 2002 sales -- ($72.9)
Plus Nov. 1-2, 2002 sales -- $43.2
Reported 4-5-4 sales $1,420.6 $1,293.5 $127.1 9.8% 5.0%
4-5-4 Adjusted Days 91 91
% Change % Change
YTD YTD Dollar Total Comp
Sales Reconciliation ($M) 2003 2002 Increase Sales Sales
Number of Days GAAP 274 273
GAAP Sales $4,559.1 $4,224.5 $334.6 7.9% 2.9%
Less Feb. 1, 2003 ($18.2) --
Less Feb. 1-2, 2002 sales -- ($30.4)
Plus Nov. 1-2, 2002 sales -- $43.2
Reported 4-5-4 sales $4,540.9 $4,237.3 $303.6 7.2% 2.6%
4-5-4 Adjusted Days 273 273
EXPANSION UPDATE
During the third quarter of 2003 Nordstrom opened four stores: two full- line stores, one in Austin, Texas, and the other in Richmond, Va. and two Rack stores in Chicago, Ill. and Ft. Lauderdale, Fla. The final new store planned for this year was opened November 14th in Wellington Green, Fla. Gross square footage for the year is expected to increase approximately 4.0 percent, from 18,428,000 to 19,131,000.
2003 OUTLOOK
The Company is providing the following 2003 forecasts:
4th Quarter 2003 Full-Year 2003
Comp-store Sales Increase 2-4% Increase 1-3%
Gross Profit (%) Moderate Moderate
improvement improvement
Selling, General and Moderate Moderate
Administrative Expense (%) improvement improvement
Service Charge Income Increase Increase
$1-2 million $12-14 million
Interest Expense Decrease Increase
$2-4 million $8-10 million
Effective Tax Rate 39% 39%
Earnings per Share $0.54 - $0.58 $1.55 - $1.59
CONFERENCE CALL INFORMATION:
Company management will be hosting a conference call and webcast to discuss third quarter results at 4:15pm (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 800-839-4564. 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 - 3rd Quarter
(unaudited; amounts in thousands, except per share data and percentages)
Quarter % of sales Quarter % of sales
ended (except as ended (except as
11/1/03 indicated) 10/31/02 indicated)
Net sales $1,420,610 100.0 $1,323,201 100.0
Cost of sales and related
buying & occupancy (911,314) (64.1) (872,154) (65.9)
Gross profit 509,296 35.9 451,047 34.1
Selling, general and
administrative expenses (450,622) (31.8) (434,921) (32.9)
Operating income 58,674 4.1 16,126 1.2
Interest expense, net (26,681) (1.9) (20,832) (1.5)
Service charge income
and other, net 42,576 3.0 35,006 2.6
Earnings before income taxes 74,569 5.2 30,300 2.3
Income tax expense (29,100) (39.0)(2) (11,873) (39.2)(2)
Net earnings $45,469 3.2 $18,427 1.4
Earnings per share
Basic $0.33 $0.14
Diluted $0.33 $0.14
ADDITIONAL DATA
Average number of shares outstanding
Basic 136,304 135,208
Diluted 138,103 135,766
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS - Year-to-Date
(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
11/1/03 indicated) 10/31/02 indicated)
Net sales $4,559,124 100.0 $4,224,490 100.0
Cost of sales and
related buying &
occupancy (2,991,967) (65.6) (2,799,277) (66.3)
Gross profit 1,567,157 34.4 1,425,213 33.7
Selling, general and
administrative
expenses (1,381,308) (30.3) (1,317,920) (31.1)
Operating income 185,849 4.1 107,293 2.6
Interest expense, net (73,043) (1.6) (60,486) (1.4)
Minority interest purchase -- -- (53,168) (1.3)
Service charge income and
other, net 114,289 2.5 103,651 2.4
Earnings before income
taxes and cumulative
effect of accounting
change 227,095 5.0 97,290 2.3
Income tax expense (88,600) (39.0)(2) (53,741) (55.2)(2)
Earnings before
cumulative effect of
accounting change 138,495 3.0 43,549 1.0
Cumulative effect of
accounting change
(net of $8,541 tax) -- -- (13,359) (0.3)
Net earnings $138,495 3.0 $30,190 0.7
Earnings per share
Basic $1.02 $0.22
Diluted $1.01 $0.22
ADDITIONAL DATA
Average number of shares outstanding
Basic 135,907 134,995
Diluted 136,659 135,719
Investor Contact: Media Contact:
Stephanie Allen, 206-303-3262 Shasha Richardson, 206-373-3038
(1) Prior year-to-date net earnings excluding charges is the sum of net
earnings of $30,190, 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 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.
CONTACT:
investors, Stephanie Allen,
+1-206-303-3262, or,
media, Shasha
Richardson,
+1-206-373-3038,
both of Nordstrom, Inc.