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 October 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 November 24, 1995: 81,171,860 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 nine months ended
October 31, 1995 and 1994 3
Consolidated Balance Sheets
October 31, 1995 and 1994 and
January 31, 1995 4
Consolidated Statements of Cash Flows
Nine months ended October 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 Nine Months
Ended October 31, Ended October 31,
--------------------- ---------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
Net sales $ 906,848 $ 861,968 $2,871,685 $2,703,531
Costs and expenses:
Cost of sales and related
buying and occupancy 612,284 569,312 1,945,802 1,803,107
Selling, general and
administrative 267,552 246,307 806,813 728,767
Interest, net 10,849 7,705 28,527 22,853
Service charge income
and other, net (32,379) (24,435) (92,741) (71,271)
---------- ---------- ---------- ----------
Total costs and
expenses 858,306 798,889 2,688,401 2,483,456
---------- ---------- ---------- ----------
Earnings before
income taxes 48,542 63,079 183,284 220,075
Income taxes 19,100 25,000 72,300 87,000
---------- ---------- ---------- ----------
Net earnings $ 29,442 $ 38,079 $ 110,984 $ 133,075
========== ========== ========== ==========
Net earnings per average
share of common stock $ .36 $ .46 $ 1.35 $ 1.62
========== ========== ========== ==========
Cash dividends paid
per share of common
stock outstanding $ .125 $ .10 $ .375 $ .285
========== ========== ========== ==========
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)
October 31, January 31, October 31,
1995 1995 1994
---------- ---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 52,324 $ 32,497 $ 43,995
Accounts receivable, net 818,314 675,891 580,408
Merchandise inventories 877,772 627,930 849,102
Prepaid income taxes and other 63,644 61,395 52,800
---------- ---------- ----------
Total current assets 1,812,054 1,397,713 1,526,305
Property, buildings and
equipment, net 1,070,051 984,195 950,489
Other assets 15,838 14,875 14,324
---------- ---------- ----------
$2,897,943 $2,396,783 $2,491,118
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 258,057 $ 87,388 $ 196,393
Accounts payable 429,147 273,084 426,486
Accrued salaries, wages
and taxes 174,233 190,501 161,038
Accrued expenses 52,878 40,990 36,583
Accrued income taxes 2,746 22,524 3,135
Current portion
of long-term debt 99,997 75,967 36,179
---------- ---------- ----------
Total current liabilities 1,017,058 690,454 859,814
Long-term debt 390,122 297,943 297,960
Deferred income taxes and other 103,558 64,586 53,129
Shareholders' equity:
Common stock, without par value:
250,000,000 shares authorized;
81,319,601, 82,244,098 and
82,188,686 shares issued
and outstanding 166,080 163,334 161,413
Retained earnings 1,221,125 1,180,466 1,118,802
---------- ---------- ----------
Total shareholders' equity 1,387,205 1,343,800 1,280,215
---------- ---------- ----------
$2,897,943 $2,396,783 $2,491,118
========== ========== ==========
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.
4 of 9
NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Nine Months
Ended October 31,
------------------
1995 1994
-------- --------
OPERATING ACTIVITIES:
Net earnings $110,984 $133,075
Adjustments to reconcile net earnings
to net cash (used in) provided by
operating activities:
Depreciation and amortization 96,468 78,901
Change in:
Accounts receivable, net (142,423) 6,033
Merchandise inventories (249,842) (263,500)
Prepaid income taxes and other (2,249) (1,151)
Accounts payable 156,063 162,431
Accrued salaries, wages and taxes (16,268) 4,091
Accrued expenses 11,888 589
Income tax liabilities and other (26,013) (18,806)
-------- --------
Net cash (used in) provided by operating
activities (61,392) 101,663
-------- --------
INVESTING ACTIVITIES:
Additions to property, buildings
and equipment, net (136,693) (183,432)
Other (248) 2,285
-------- --------
Net cash used in investing activities (136,941) (181,147)
-------- --------
FINANCING ACTIVITIES:
Increase in notes payable 170,669 156,056
Proceeds from issuance of long-term debt, net 140,861 -
Principal payments on long-term debt (25,791) (104,435)
Proceeds from issuance of common stock 2,746 4,039
Cash dividends paid (30,848) (23,403)
Purchase and retirement of common stock (39,477) -
-------- --------
Net cash provided by financing activities 218,160 32,257
-------- --------
Net increase (decrease) in cash
and cash equivalents 19,827 (47,227)
Cash and cash equivalents at
beginning of period 32,497 91,222
-------- --------
Cash and cash equivalents at end of period $ 52,324 $ 43,995
======== ========
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 October 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 October 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 October 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 Nine Months
Ended October 31, Ended October 31,
1995 1994 1995 1994
-------- -------- -------- --------
Total revenue $36,338 $26,745 $98,176 $75,898
Earnings before income
taxes 12,589 9,085 27,064 27,472
Net earnings 8,004 5,755 17,264 17,502
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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 third quarter of 1995, sales increased 5.2% when compared with the
same quarter in 1994. For the nine-month period, sales increased 6.2%
compared to the same period in 1994. These sales increases were attributable
entirely to new units as comparable store sales decreased by 2.0% for the
quarter and .6% for the nine-month period. The disappointing comparable
store sales results reflect a continuing sluggish retail climate for apparel
sales. 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 nine-month period as compared to the
corresponding periods in 1994 due primarily to higher occupancy costs
resulting from new stores and remodeling projects. Buying costs also
increased during the quarter and the nine-month period because of spending
on development and implementation of an inventory management system, and on
development of the Company's own merchandise brands.
Selling, general and administrative expenses increased as a percentage of
sales during the quarter and the nine-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 bad debt and promotional 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
third quarter and for the nine-month period, as compared to the same periods
in 1994, primarily due to net revenues resulting from the Company's VISA card
program which commenced in May, 1994. For the nine-month period, 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) 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 October 31, 1995 increased when compared to
October 31, 1994 and January 31, 1995 due primarily to increased investment
in accounts receivable and merchandise inventories. During the nine-months
ended October 31, 1995, the Company issued $141 million in medium term notes
to fund its expansion and general working capital needs.
During the third quarter the Company opened two new full-line stores in The
Mall at Short Hills in Millburn, New Jersey and Circle Centre Mall in
Indianopolis, Indiana and a rack store in the Supermall of the Great Northwest
in Auburn, Washington. This completes the store opening schedule for the
year. Construction is progressing as planned on new stores scheduled to open
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
-------------------
No reports on Form 8-K were filed during the quarter for which
this report is filed.
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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: December 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
1,000
9-MOS
JAN-31-1996
OCT-31-1995
52,324
0
818,314
0
877,772
1,812,054
1,070,051
0
2,897,943
1,017,058
390,122
166,080
0
0
1,221,125
2,897,943
2,871,685
2,871,685
1,945,802
2,688,401
0
0
28,527
183,284
72,300
0
0
0
0
110,984
1.35
1.35
