Nordstrom, Inc. reported earnings more than doubled in the fourth quarter to $172 million, or 77 per diluted share, from $68 million, or 31 cents a year ago. Fourth quarter same-store sales increased 6.9% compared with the same period in fiscal 2008. Net sales in the fourth quarter were $2.54 billion, an increase of 10.3% against $2.30 billion a year ago.

FOURTH QUARTER SUMMARY

Nordstrom’s fourth quarter performance reflected a continuation of the discipline and execution the company demonstrated throughout the year. The breadth and quality of its merchandise offering, combined with a steady flow of fashion into the stores, led to same-store sales increases in each month of the quarter.

    * Full-line same-store sales in the fourth quarter increased 3.9% and sales for Nordstrom Direct increased 32.1%, combining for a multi-channel same-store sales increase of 7.1% compared with the same period in fiscal 2008. Most of the company’s merchandise categories generated positive same-store sales during the quarter. Highlights for multi-channel sales performance included Women’s Better Apparel, Women’s Shoes and Jewelry. The Midwest, South, and Northwest regions were the top-performing geographic areas for full-line stores relative to the fourth quarter of 2008.
    * Nordstrom Rack experienced its fourth consecutive quarter of positive performance with a same-store sales increase of 4.6% in the fourth quarter compared with the same period in fiscal 2008. During the fourth quarter, the company opened two Nordstrom Rack stores.
    * Gross profit, as a percentage of net sales, increased approximately 530 basis points compared with last year’s fourth quarter. The improvement was mainly driven by merchandise margin as a percentage of net sales. Additionally, the increase in sales allowed for some leverage in buying and occupancy costs as a percentage of net sales, despite higher performance-related expenses. Markdowns were reduced considerably from last year’s fourth quarter, which was a highly promotional period. The company saw improvement in its management of inventory and ended the year with an inventory turn of 5.4, the highest in recent company history despite a decline in annual same-store sales.
    * Retail selling, general and administrative expenses increased $56 million compared with last year’s fourth quarter. The increase was due primarily to higher performance-related and variable expenses which increased as a result of the improvement in sales, partially offset by a decrease in fixed expenses. Retail selling, general and administrative expenses also were impacted by an additional $13 million from stores opened since the fourth quarter of 2008. The company opened 3 full-line stores and 13 Nordstrom Rack stores since the fourth quarter of 2008, increasing retail square footage by 0.9 million, or 4.1%.
    * Credit selling, general, and administrative expenses increased $16 million compared with last year’s fourth quarter. The majority of the increase reflects higher bad debt expense. Based on fourth quarter trends and continuing uncertainty regarding the overall economic environment, the company increased its reserve for bad debt by $20 million in the quarter.

FULL YEAR RESULTS

For the fiscal year ended January 30, 2010, net earnings were $441 million, an increase of 10% compared with net earnings of $401 million for the fiscal year ended January 31, 2009. Earnings per diluted share for the same periods were $2.01 and $1.83, respectively.

Full year same-store sales decreased 4.2% compared with fiscal 2008. Net sales for the year were $8.26 billion, a decrease of 0.2% compared with prior year net sales of $8.27 billion.

NORDSTROM, INC.

CONSOLIDATED STATEMENTS OF
EARNINGS 4th
Quarter and Fiscal Year


(unaudited; amounts in millions, except per share data)


 

 



Quarter ended

Year ended



 
1/30/10
 
 
 
1/31/09
 

 
1/30/10
 
 
 
1/31/09
 








 

Net sales

$
2,539


$
2,301


$
8,258


$
8,272

Credit card revenues

 
101
 

 
85
 

 
369
 

 
301
 

Total revenues


2,640



2,386



8,627



8,573

Cost of sales and related buying & occupancy costs


(1,593
)


(1,565
)


(5,328
)


(5,417
)

Selling, general and administrative expenses:








Retail stores, direct and other segments


(631
)


(575
)


(2,109
)


(2,103
)

Credit segment

 
(106
)

 
(90
)

 
(356
)

 
(274
)

Earnings before interest and income taxes


310



156



834



779

Interest expense, net

 
(33
)

 
(33
)

 
(138
)

 
(131
)

Earnings before income taxes


277



123



696



648

Income tax expense

 
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