Nordstrom, Inc. reported net earnings of $68 million, or 31 cents per diluted share, for the fourth quarter ended Jan. 31, 2009. For the same quarter last year, Nordstrom reported net earnings of $212 million, or 92 cents per diluted share.


Total sales in the fourth quarter were $2.30 billion, a decrease of 8.5% compared with sales of $2.51 billion during the same period in fiscal 2007. Fourth quarter same-store sales decreased 12.5% compared with the same period in fiscal 2007.


Fourth Quarter Summary


Although the retail operating environment was difficult, Nordstrom said it 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 30 cents.


Results in full-line stores continued to be challenging, as same-store sales decreased 15.8%.


Nordstrom Rack was one of the top performers amongst its off-price competitors with a same-store sales decrease of 1.5%.

Sales for Nordstrom Direct continued to be strong, increasing 9.7%.

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% from the prior year, which is in-line with the fourth quarter same-store sales decrease of 12.5%.


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%.

Full year results


For the fiscal year ended Jan. 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 9 cents per diluted share, for the sale of the Faconnable business during the third quarter of 2007.


Total sales for the year decreased 6.3% to $8.3 billion compared with prior year sales of $8.8 billion. Full year same-store sales decreased 9.0 percent.


Fiscal Year 2009 Outlook


Nordstrom is planning for 2009 based on the trends the company experienced in the second-half of 2008. The company said it 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%, which yields earnings per share in the range of $1.10 to $1.40 for the full year.


Given the uncertainty surrounding the economic environment, Nordstrom said it 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.



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

                                                % of                 % of
                                    Quarter    sales(1)   Quarter   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


    (1) Subtotals and totals may not foot due to rounding.
    (2) Percent of earnings before income taxes.