SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 0-6074
Nordstrom, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Washington 91-0515058
_______________________________ ___________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1501 Fifth Avenue, Seattle, Washington 98101
____________________________________________________
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206) 628-2111
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES X NO
_____ _____
Common stock outstanding as of August 18, 1995: 82,142,147 shares of
common stock.
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NORDSTROM, INC. AND SUBSIDIARIES
--------------------------------
INDEX
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Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Statements of Earnings
Three and six months ended
July 31, 1995 and 1994 3
Consolidated Balance Sheets
July 31, 1995 and 1994 and
January 31, 1995 4
Consolidated Statements of Cash Flows
Six months ended July 31, 1995 and 1994 5
Notes to Consolidated Financial Information 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K 8
2 of 9
NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in thousands except per share amounts)
(unaudited)
Three Months Six Months
Ended July 31, Ended July 31,
--------------------- ---------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
Net sales $1,149,239 $1,079,501 $1,964,838 $1,841,563
Costs and expenses:
Cost of sales and related
buying and occupancy 779,784 723,660 1,333,518 1,233,795
Selling, general and
administrative 299,838 267,596 539,261 482,460
Interest, net 9,639 7,206 17,679 15,148
Service charge income
and other, net (29,087) (23,184) (60,362) (46,836)
---------- ---------- ---------- ----------
Total costs and
expenses 1,060,174 975,278 1,830,096 1,684,567
---------- ---------- ---------- ----------
Earnings before
income taxes 89,065 104,223 134,742 156,996
Income taxes 35,200 41,200 53,200 62,000
---------- ---------- ---------- ----------
Net earnings $ 53,865 $ 63,023 $ 81,542 $ 94,996
========== ========== ========== ==========
Net earnings per average
share of common stock $ .65 $ .77 $ .99 $ 1.16
========== ========== ========== ==========
Cash dividends paid
per share of common
stock outstanding $ .125 $ .10 $ .25 $ .185
========== ========== ========== ==========
These statements should be read in conjunction with the Notes to
Consolidated Financial Statements contained herein and in the Nordstrom
1994 Annual Report to Shareholders.
3 of 9
NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
July 31, January 31, July 31,
1995 1995 1994
---------- ---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 35,564 $ 32,497 $ 50,690
Accounts receivable, net 837,833 675,891 630,085
Merchandise inventories 696,224 627,930 639,227
Prepaid income taxes and other 59,721 61,395 51,529
---------- ---------- ----------
Total current assets 1,629,342 1,397,713 1,371,531
Property, buildings and
equipment, net 1,040,483 984,195 917,066
Other assets 15,929 14,875 23,653
---------- ---------- ----------
$2,685,754 $2,396,783 $2,312,250
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 97,207 $ 87,388 $ 115,738
Accounts payable 369,634 273,084 339,660
Accrued salaries, wages
and taxes 170,493 190,501 156,600
Accrued expenses 48,423 40,990 33,230
Accrued income taxes 19,669 22,524 22,710
Current portion
of long-term debt 50,997 75,967 36,179
---------- ---------- ----------
Total current liabilities 756,423 690,454 704,117
Long-term debt 439,297 297,943 310,688
Deferred income taxes and other 88,438 64,586 48,676
Shareholders' equity:
Common stock, without par value:
250,000,000 shares authorized;
82,174,647, 82,244,098 and
82,134,350 shares issued
and outstanding 165,158 163,334 159,831
Retained earnings 1,236,438 1,180,466 1,088,938
---------- ---------- ----------
Total shareholders' equity 1,401,596 1,343,800 1,248,769
---------- ---------- ----------
$2,685,754 $2,396,783 $2,312,250
========== ========== ==========
These statements should be read in conjunction with the Notes to
Consolidated Financial Statements contained herein and in the Nordstrom
1994 Annual Report to Shareholders.
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NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Six Months
Ended July 31,
------------------
1995 1994
-------- --------
OPERATING ACTIVITIES:
Net earnings $ 81,542 $ 94,996
Adjustments to reconcile net earnings
to net cash (used in) provided by
operating activities:
Depreciation and amortization 61,311 50,499
Change in:
Accounts receivable, net (161,942) (43,644)
Merchandise inventories (68,294) (53,625)
Prepaid income taxes and other 1,674 120
Accounts payable 96,550 75,605
Accrued salaries, wages and taxes (20,008) (347)
Accrued expenses 7,433 (2,764)
Income tax liabilities and other (4,320) (3,684)
-------- --------
Net cash (used in) provided by operating
activities (6,054) 117,156
-------- --------
INVESTING ACTIVITIES:
Additions to property, buildings
and equipment, net (92,014) (121,709)
Other (240) (6,942)
-------- --------
Net cash used in investing activities (92,254) (128,651)
-------- --------
FINANCING ACTIVITIES:
Increase in notes payable 9,819 75,401
Proceeds from issuance of long-term debt, net 140,919 -
Principal payments on long-term debt (25,616) (91,707)
Proceeds from issuance of common stock 1,823 2,457
Cash dividends paid (20,566) (15,188)
Repurchase of common stock (5,004) -
-------- --------
Net cash provided by (used in)
financing activities 101,375 (29,037)
-------- --------
Net increase in cash and cash equivalents 3,067 (40,532)
Cash and cash equivalents at
beginning of period 32,497 91,222
-------- --------
Cash and cash equivalents at end of period $ 35,564 $ 50,690
======== ========
These statements should be read in conjunction with the Notes to
Consolidated Financial Statements contained herein and in the Nordstrom
1994 Annual Report to Shareholders.
5 of 9
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
(unaudited)
Note 1:
The consolidated balance sheets of Nordstrom, Inc. and subsidiaries (the
"Company") as of July 31, 1995 and 1994, and the related consolidated
statements of earnings and cash flows for the periods then ended, have been
prepared from the accounts without audit.
The consolidated financial information is applicable to interim periods
and is not necessarily indicative of the results to be expected for the
year ending January 31, 1996.
It is not considered necessary to include detailed footnote information
as of July 31, 1995 and 1994. The financial information should be read
in conjunction with the Notes to Consolidated Financial Statements
contained in the Nordstrom 1994 Annual Report to Shareholders.
In the opinion of management, the consolidated financial information
includes all adjustments (consisting only of normal, recurring
adjustments) necessary to present fairly the financial position of
Nordstrom, Inc. and subsidiaries as of July 31, 1995 and 1994, and the
results of their operations and cash flows for the periods then ended,
in accordance with generally accepted accounting principles applied on a
consistent basis.
Note 2: The summarized unaudited combined results of operations of
Nordstrom Credit, Inc. and Nordstrom National Credit Bank are
as follows:
Three Months Six Months
Ended July 31, Ended July 31,
1995 1994 1995 1994
------- ------- ------- -------
Total revenue $32,315 $24,411 $61,838 $49,153
Earnings before income
taxes 5,749 8,102 14,475 18,387
Net earnings 3,674 5,162 9,260 11,747
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NORDSTROM, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Management
Discussion and Analysis section of the Nordstrom 1994 Annual Report to
Shareholders.
Results of Operations:
- ----------------------
During the second quarter of 1995, sales increased 6.5% when compared with the
same quarter in 1994. For the six-month period, sales increased 6.7% compared
to the same period in 1994. New unit sales accounted for substantially all of
the sales increase for both the quarter and six-month period, as comparable
store sales increased by .4% for the quarter and .1% for the six month period.
The comparable store sales results reflect disappointing sales from the
Company's anniversary sale in July, as well as a continuing sluggish retail
climate. The Company remains cautious with respect to sales projections for
the remainder of the year.
Cost of sales and related buying and occupancy costs increased as a percentage
of sales for the quarter and the six-month period as compared to the
corresponding periods in 1994. Buying costs increased because of spending on
development and implementation of an inventory management system, and on
development of the Company's own merchandise brands. Occupancy costs also
increased during the quarter and the six-month period due to new stores and
remodeling projects.
Selling, general and administrative expenses increased as a percentage of
sales during the second quarter and for the six-month period as compared to
the corresponding periods in 1994. Factors that contributed to the increase
included higher selling costs, higher sales promotion costs for the Company's
direct sales division, increased promotional and bad debt expenses related to
the Company's VISA card program, and spending on the development of a new
payroll system. These costs were partially offset by lower employee benefit
costs.
Service charge income and other, net increased as a percentage of sales for
the second quarter and for the six-month period, as compared to the same
periods in 1994. For the six-month period, the increase was due primarily to
one-time gains on the sale of a closed distribution facility and a full-line
store, totaling $6.3 million ($.05 per share after income taxes). For both
the quarter and the six-month period, net revenues resulting from the
Company's VISA card program also contributed to the increase.
7 of 9
NORDSTROM, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition:
- --------------------
The Company's working capital at July 31, 1995 increased when compared to
July 31, 1994 and January 31, 1995 due primarily to increased investment in
accounts receivable and merchandise inventories. During the six months ended
July 31, 1995, the Company issued $141 million in medium term notes to fund
its expansion and general working capital needs.
In August 1995, the Company opened a full-line store in Millburn, New Jersey
and a rack store in Auburn, Washington. Construction is progressing as
planned on new stores scheduled to open later this year and in 1996.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
The Company is not involved in any material pending legal proceedings,
other than routine litigation in the ordinary course of business.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
(27.1) Financial Data Schedule is filed herein as an Exhibit.
(b) Reports on Form 8-K
-------------------
The Company filed a Form 8-K, dated June 19, 1995, reporting
changes in its top level of management.
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SIGNATURES
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 thereunto duly authorized.
NORDSTROM, INC.
(Registrant)
/s/ John A. Goesling
------------------------------------------
John A. Goesling, Executive Vice President
and Treasurer
(Principal Financial and Accounting Officer)
Date: September 5, 1995
- ------------------------
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NORDSTROM, INC. AND SUBSIDIARIES
Exhibit Index
Exhibit Method of Filing
- ------- ----------------
27.1 Financial Data Schedule Filed herewith electronically
5
1000
6-MOS
JAN-31-1996
JUL-31-1995
35564
0
837833
0
696224
1629342
1040483
0
2685754
756423
439297
165158
0
0
1236438
2685754
1964838
1964838
1333518
1830096
0
0
17679
134742
53200
0
0
0
0
81542
.99
.99
