UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) February 23, 2009 NORDSTROM, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) WASHINGTON 001-15059 91-0515058 (STATE OR OTHER JURISDICTION (COMMISSION FILE (I.R.S. EMPLOYER OF INCORPORATION) NUMBER) IDENTIFICATION NO.) 1617 SIXTH AVENUE, SEATTLE, WASHINGTON 98101 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (206) 628-2111 INAPPLICABLE (FORMER NAME OR FORMER ADDRESS IF CHANGED SINCE LAST REPORT) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): ___ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ___ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ___ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition On February 23, 2009, Nordstrom, Inc. issued an earnings release announcing its results of operations for the quarter and year ended January 31, 2009, its financial position as of January 31, 2009, and its cash flows for the year ended January 31, 2009. A copy of this earnings release is attached as Exhibit 99.1. ITEM 7.01 Regulation FD Disclosure On February 23, 2009, Nordstrom, Inc. issued an earnings release announcing its results of operations for the quarter and year ended January 31, 2009, its financial position as of January 31, 2009, and its cash flows for the year ended January 31, 2009. A copy of this earnings release is attached as Exhibit 99.1. ITEM 9.01 Financial Statements and Exhibits 99.1 Nordstrom earnings release dated February 23, 2009 relating to the Company's results of operations for the quarter and year ended January 31, 2009, its financial position as of January 31, 2009, and its cash flows for the year ended January 31, 2009. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NORDSTROM, INC. By: /s/Michael G. Koppel ----------------------- Michael G. Koppel Executive Vice President and Chief Financial Officer Dated: February 23, 2009 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 99.1 Nordstrom earnings release dated February 23, 2009 relating to the Company's results of operations for the quarter and year ended January 31, 2009, its financial position as of January 31, 2009, and its cash flows for the year ended January 31, 2009.
Exhibit 99.1 NORDSTROM For release: February 23, 2009 at 1:05 p.m. PT - -------------------------------------------- NORDSTROM REPORTS FOURTH QUARTER AND FISCAL YEAR 2008 EARNINGS SEATTLE, Wash. - February 23, 2009 - Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $68 million, or $0.31 per diluted share, for the fourth quarter ended January 31, 2009. For the same quarter last year, Nordstrom reported net earnings of $212 million, or $0.92 per diluted share. Total sales in the fourth quarter were $2.30 billion, a decrease of 8.5 percent compared with sales of $2.51 billion during the same period in fiscal 2007. Fourth quarter same-store sales decreased 12.5 percent compared with the same period in fiscal 2007. FOURTH QUARTER SUMMARY Although the retail operating environment was difficult, Nordstrom continued to align the key drivers of its business to the current economic realities. The company made good progress adjusting inventory levels to current sales trends, reducing expenses without compromising its commitment to the customer and lowering capital expenditures. Fourth quarter sales were slightly better than original expectations and earnings per share were in-line with consensus expectations of $0.30. -Results in full-line stores continued to be challenging, as same-store sales decreased 15.8 percent. -Nordstrom Rack was one of the top performers amongst its off-price competitors with a same-store sales decrease of 1.5 percent. -Sales for Nordstrom Direct continued to be strong, increasing 9.7 percent. -Gross profit, as a percentage of sales, decreased 561 basis points compared with last year's fourth quarter, due to significantly higher levels of markdowns. Nordstrom's merchant and store teams responded well to the intense competitive environment, preserving the company's market share. Year- end inventory per square foot was down 12 percent from the prior year, which is in-line with the fourth quarter same-store sales decrease of 12.5 percent. -Selling, general and administrative expenses decreased $25 million, excluding additional expenses of $58 million from higher reserves for bad debt and new stores. The company opened 8 new full-line stores and 6 new Nordstrom Rack stores since the fourth quarter of 2007, increasing retail square footage by 1.4 million or 6.7 percent. FULL YEAR RESULTS For the fiscal year ended January 31, 2009, net earnings were $401 million compared with net earnings of $715 million last year. Earnings per diluted share for the same periods were $1.83 and $2.88, respectively. Fiscal 2007 full year results include a gain of $20.9 million, net of tax, or $0.09 per diluted share, for the sale of the Faconnable business during the third quarter of 2007. Total sales for the year decreased 6.3 percent to $8.3 billion compared with prior year sales of $8.8 billion. Full year same-store sales decreased 9.0 percent. EXPANSION UPDATE In 2009, Nordstrom plans to open three new full-line stores and relocate one full-line store: -On March 6, a relocated full-line store at Fashion Place in Murray, Utah that replaces a store built in 1981 -On March 27, a new store at the Cherry Hill Mall in Cherry Hill, New Jersey -On April 17, the company's third Boston-area store at the Northshore Mall in Peabody, Massachusetts -On September 25, a new store at Kenwood Towne Centre in Cincinnati, Ohio In spring 2009, Nordstrom plans to open five new Nordstrom Rack stores: -Park Lane in Dallas, Texas -Bergen Town Center in Paramus, New Jersey -The Commons at Southtowne in Sandy, Utah -Orland Park Place in Orland Park, Illinois -Ravenswood 101 in East Palo Alto, California In fall 2009, Nordstrom plans to open five new Nordstrom Rack stores: -Beverly Connection in Los Angeles, California -Shops of Southlake in Southlake, Texas -Millenia Crossing in Orlando, Florida -Hastings Village in Pasadena, California -Rookwood Pavilion in Cincinnati, Ohio FISCAL YEAR 2009 OUTLOOK Nordstrom is planning for 2009 based on the trends the company experienced in the second-half of 2008. The company will continue to align the key drivers of its business (inventory, expenses, working capital and capital expenditures) to mitigate operating margin pressure, enhance free cash flow and maintain a healthy balance sheet. For the 2009 fiscal year, Nordstrom expects same-store sales to decrease 10 to 15 percent, which yields earnings per share in the range of $1.10 to $1.40 for the full year. Outlined in the table below are the company's expectations for fiscal year 2009: Same-store Sales 10% to 15% decrease Gross Profit (%) 150 to 250 basis point decrease Selling, General and Admin. Expense ($) $100 to $175 million decrease Selling, General and Admin. Expense (%) 40 to 70 basis point increase Finance Charges and Other, net $55 to $60 million increase Interest Expense, net $20 to $25 million increase Effective Tax Rate 39.4% to 39.7% Earnings per Diluted Share $1.10 to $1.40 Diluted Shares Outstanding 219 million It has always been Nordstrom's practice to clearly and openly communicate with its shareholders and other constituencies. In this spirit, the company will continue to provide its expectations for annual results, which it will update with each quarterly earnings release. As the economy has weakened and become more unpredictable, it has become difficult to accurately predict near- term results. Given the uncertainty surrounding the economic environment, Nordstrom does not feel it is appropriate to continue providing quarterly EPS estimates. Nordstrom believes that providing its annual expectations in line- item detail, combined with the continued release of monthly sales, will allow interested parties to effectively monitor and assess the company's performance. The company expects same-store sales in the first half of 2009 to be 300 to 400 basis points below the outlook for the fiscal year. CONFERENCE CALL INFORMATION The company's senior management will host a conference call to discuss fourth quarter results at 5:00 p.m. Eastern Time today. To listen, please dial 800- 779-8419 or 312-470-7356 (passcode: NORD). A telephone replay will be available beginning approximately one hour after the conclusion of the call by dialing 800-366-0275 or 203-369-3260 until the close of business on March 2, 2009. Interested parties may also listen to the live call over the Internet by visiting the Investor Relations section of the company's corporate Web site at http://investor.nordstrom.com. An archived webcast will be available in the Webcasts section through May 24, 2009. ABOUT NORDSTROM Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 169 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 109 full-line stores, 56 Nordstrom Racks, two Jeffrey boutiques, and two clearance stores. Nordstrom also 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 involve risks and uncertainties, including, but not limited to, anticipated financial results for the fiscal year ending January 30, 2010 and its first half, anticipated annual same-store sales rate, anticipated store openings and trends in company operations. Such statements are based upon current beliefs and expectations of the company's management and are subject to significant risks and uncertainties. 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 deteriorating economic and market conditions and the resultant impact on consumer spending patterns, the company's ability to respond to the business environment and fashion trends, the competitive pricing environment within the retail sector, effective inventory management, the effectiveness of planned advertising, marketing, and promotional campaigns, successful execution of the company's store growth strategy including the timely completion of construction associated with newly planned stores, relocations, and remodels, all of which may be impacted by the financial health of third parties, the company's compliance with applicable banking and related laws and regulations impacting the company's ability to extend credit to its customers, the company's compliance with information security and privacy laws and regulations, employment laws and regulations and other laws and regulations applicable to the company, successful execution of the company's multi-channel strategy, the company's ability to safeguard its brand and reputation, efficient and proper allocation of the company's capital resources, successful execution of the company's technology strategy, trends in personal bankruptcies and bad debt write-offs, availability and cost of credit, changes in interest rates, the company's ability to maintain its relationships with company employees and to effectively train and develop its future leaders, the company's ability to control costs, risks related to fluctuations in world currencies, weather conditions and hazards of nature that affect consumer traffic and consumers' purchasing patterns, and the timing and amounts of share repurchases by the company. Our SEC reports, including our Form 10-K for the fiscal year ended February 2, 2008, our Form 10-Q for the fiscal quarter ended November 1, 2008, and our Form 10-K for the fiscal year ended January 31, 2009, to be filed with the SEC on or about March 20, 2009, 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. Investor Contact: Media Contact: Chris Holloway Brooke White Nordstrom, Inc. Nordstrom, Inc. (206) 303-3290 (206) 373-3030 NORDSTROM, INC. CONSOLIDATED STATEMENTS OF EARNINGS - 4th Quarter (unaudited; amounts in millions, except per share data and percentages) (1) Subtotals and totals may not foot due to rounding. (2) Percent of earnings before income taxes.
Quarter % of sales(1) Quarter % of sales(1) ended (except as ended (except as 1/31/09 indicated) 2/2/08 indicated) ---------- ---------- ---------- --------- Net sales $ 2,301 100.0% $ 2,514 100.0% Cost of sales and related buying & occupancy costs (1,565) (68.0%) (1,569) (62.4%) ---------- ---------- Gross profit 736 32.0% 945 37.6% Selling, general and administrative expenses (670) (29.1%) (637) (25.4%) Finance charges and other, net 90 3.9% 76 3.0% ---------- ---------- Earnings before interest and income taxes 156 6.8% 384 15.3% Interest expense, net (33) (1.5%) (30) (1.2%) ---------- ---------- Earnings before income taxes 123 5.3% 354 14.1% Income tax expense (55) (44.5%)(2) (142) (40.2%)(2) ---------- ---------- Net earnings $ 68 3.0% $ 212 8.4% ========== ========== Earnings per share Basic $ 0.32 $ 0.93 Diluted $ 0.31 $ 0.92 ADDITIONAL DATA Weighted average shares outstanding Basic 215.6 228.5 Diluted 216.8 231.6 NORDSTROM, INC. CONSOLIDATED STATEMENTS OF EARNINGS - Fiscal Year (unaudited; amounts in millions, except per share data and percentages) (1) Subtotals and totals may not foot due to rounding. (2) Percent of earnings before income taxes.
Year % of sales(1) Year % of sales(1) ended (except as ended (except as 1/31/09 indicated) 2/2/08 indicated) ---------- ---------- ---------- --------- Net sales $ 8,272 100.0% $ 8,828 100.0% Cost of sales and related buying & occupancy costs (5,417) (65.5%) (5,526) (62.6%) ---------- ---------- Gross profit 2,855 34.5% 3,302 37.4% Selling, general and administrative expenses (2,386) (28.8%) (2,360) (26.7%) Finance charges and other, net 310 3.8% 271 3.1% Gain on sale of Faconnable - - 34 0.4% ---------- ---------- Earnings before interest and income taxes 779 9.4% 1,247 14.1% Interest expense, net (131) (1.6%) (74) (0.8%) ---------- ---------- Earnings before income taxes 648 7.8% 1,173 13.3% Income tax expense (247) (38.1%)(2) (458) (39.0%)(2) ---------- ---------- Net earnings $ 401 4.8% $ 715 8.1% ========== ========== Earnings per share Basic $ 1.85 $ 2.92 Diluted $ 1.83 $ 2.88 ADDITIONAL DATA Weighted average shares outstanding Basic 216.6 244.8 Diluted 219.2 248.8 NORDSTROM, INC. CONSOLIDATED BALANCE SHEETS ------------------------------------------------------ (unaudited; amounts in millions)
1/31/09 2/2/08 ---------- ---------- Assets Current assets: Cash and cash equivalents $ 72 $ 358 Accounts receivable, net 1,942 1,788 Merchandise inventories 900 956 Current deferred tax assets, net 210 181 Prepaid expenses and other 93 78 ---------- ---------- Total current assets 3,217 3,361 Land, buildings and equipment, net 2,221 1,983 Goodwill 53 53 Other assets 170 203 ---------- ---------- Total assets $ 5,661 $ 5,600 =========== =========== Liabilities and Shareholders' Equity Current liabilities: Commercial paper $ 275 $ - Accounts payable 563 556 Accrued salaries, wages and related benefits 214 268 Other current liabilities 525 550 Current portion of long-term debt 24 261 ---------- ---------- Total current liabilities 1,601 1,635 Long-term debt, net 2,214 2,236 Deferred property incentives, net 435 369 Other liabilities 201 245 Commitments and contingent liabilities Shareholders' equity: Common stock, no par value: 1,000 shares authorized; 215.4 and 220.9 shares issued and outstanding 997 936 Retained earnings 223 201 Accumulated other comprehensive loss (10) (22) ---------- ---------- Total shareholders' equity 1,210 1,115 ---------- ---------- Total liabilities and shareholders' equity $ 5,661 $ 5,600 =========== =========== NORDSTROM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------------------------ (unaudited; amounts in millions)
Year Year ended ended 1/31/09 2/2/08 ----------- ----------- Operating Activities Net earnings $ 401 $ 715 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of buildings and equipment 302 269 Gain on sale of Faconnable - (34) Amortization of deferred property incentives and other, net (21) (36) Stock-based compensation expense 28 26 Deferred income taxes, net (36) (42) Tax benefit from stock-based payments 3 28 Excess tax benefit from stock-based payments (4) (26) Provision for bad debt expense 173 107 Change in operating assets and liabilities: Accounts receivable (93) (1,083) Investment in asset backed securities - 420 Merchandise inventories 53 - Prepaid expenses 9 (9) Other assets 29 (27) Accounts payable 16 (19) Accrued salaries, wages and related benefits (54) (64) Other current liabilities 28 36 Income taxes (76) (6) Deferred property incentives 119 58 Other liabilities (29) (1) ----------- ----------- Net cash provided by operating activities 848 312 ----------- ----------- Investing Activities Capital expenditures (563) (501) Change in accounts receivable originated at third parties (232) (151) Proceeds from sale of Faconnable - 216 Proceeds from sale of assets 2 12 Other, net 1 3 ----------- ----------- Net cash used in investing activities (792) (421) ----------- ----------- Financing Activities Proceeds from commercial paper 275 - Proceeds from long-term borrowings, net 150 2,510 Principal payments on long-term borrowings (410) (680) Increase in cash book overdrafts 20 5 Proceeds from exercise of stock options 13 34 Proceeds from employee stock purchase plan 17 17 Excess tax benefit from stock-based payments 4 26 Cash dividends paid (138) (134) Repurchase of common stock (264) (1,702) Other, net (9) (12) ----------- ----------- Net cash (used in) provided by financing activities (342) 64 ----------- ----------- Net decrease in cash and cash equivalents (286) (45) Cash and cash equivalents at beginning of year 358 403 ----------- ----------- Cash and cash equivalents at end of year $ 72 $ 358 =========== ===========