Nordstrom reported net earnings of $68.7 million, or $0.48 per diluted share, for the first quarter of 2004, which ended May 1, 2004. For the same period last year, net earnings and earnings per diluted share were $27.2 million and $0.20, respectively. 2004 results include $20.8 million or $0.08 per share of interest expense related to retirement of debt during the quarter.
Total sales for the first quarter of 2004 increased 16.6 percent, to $1.5 billion, compared to sales of $1.3 billion in the same period last year. First quarter 2004 same-store sales increased 13.2 percent.
FIRST QUARTER HIGHLIGHTS
Earnings increased 153 percent in the first quarter compared to the same quarter last year, ahead of expectations and reflecting ongoing fundamental improvement in performance. The company continues to deliver operating improvements in all aspects of its business including merchandising, inventory productivity and expense management.
-- Same-store sales increased 13.2 percent, ahead of the company's planned four to six percent increase. -- Gross profit improved 320 basis points, driven by strong sell through and lower markdowns compared to the prior year. -- Selling, general and administrative expenses as a percent to sales decreased 180 basis points primarily due to on-plan expenses leveraged by better than expected sales. GAAP SALES PERFORMANCE
The additional information provided in this section is to comply with the Securities and Exchange Commission's Regulation G. The company converted to a 4-5-4 Retail Calendar at the beginning of 2003. The first quarter of 2003 includes one more day than the first quarter of 2004. The company believes that adjusting for this difference provides a more comparable basis from which to evaluate sales performance. The following reconciliation bridges the quarter-to-date 2003 GAAP sales to the 4-5-4 comparable sales.
% Change % Change Sales Reconciliation ($M) Dollar Total Comp QTD 2003 QTD 2004 Increase Sales Sales Number of Days GAAP 92 91 GAAP Sales $1,335.5 $1,535.5 $200.0 15.0% 11.5% Less Feb. 1, 2003 sales ($18.2) -- Reported 4-5-4 sales $1,317.3 $1,535.5 $218.2 16.6% 13.2% 4-5-4 Adjusted Days 91 91 EXPANSION UPDATE
During the first quarter Nordstrom opened one full-line store at SouthPark Mall in Charlotte, North Carolina. The company plans to open one additional store this year; a full-line store at Dadeland Mall in Miami scheduled to open later this fall. Gross square footage for the year is expected to increase approximately 2 percent, from 19,138,000 to 19,439,000.
The company is providing the following 2004 forecasts:
2nd Quarter 2004 Full-Year 2004
Comp-store Sales 4% - 6% increase 4% -6% increase
Gross Profit (%) Significant improvement 100-130 basis point
Selling, General and
Expense (%) Moderate improvement 100-130 basis point
Service Charge Income $2-$4 million increase $7-$9 million
Interest Expense $11-$13 million decrease $11-$13 million
Effective Tax Rate 39% 39%
Earnings per Share $0.70 - $0.74 $2.42 - $2.46
Outstanding Approx. 143 million Approx. 143 million
Prior Year Diluted EPS $0.48 $1.76