Nordstrom Q2 Earnings Up 82% on 3.9% Comp Store Gain

Nordstrom, Inc. reported net earnings of $65.9 million, or $0.48 per diluted share, for the second quarter of 2003, which ended August 2, 2003. For the same period last year, net earnings and earnings per diluted share were $36.3 million and $0.27, respectively. Excluding $16.1 million (net of tax) in non-recurring and impairment charges(1), second quarter 2002 net earnings and earnings per diluted share were $52.4 million and $0.39, respectively. Better-than-plan sales and expenses drove the 26 percent increase in earnings for the quarter, excluding 2002 non-recurring and impairment charges.

Net sales for the second quarter of 2003 increased 7.9 percent, to $1.8 billion, compared to sales of $1.7 billion in the same period last year. Second quarter 2003 same-store sales increased 3.9 percent.

“We have worked very hard to improve our service, which has resulted in better sales,” commented President Blake Nordstrom. “Strong sales coupled with disciplined expense control resulted in enhanced margins for the quarter. We feel we are headed in the right direction.”

Year-to-date net earnings and earnings per share for the period ended August 2, 2003, were $93.0 million and $0.68 respectively, compared to net earnings and earnings per share of $11.8 million and $0.09 for the same period in 2002. Excluding $71.0 million (net of tax) in non-recurring and impairment charges(2), year-to-date 2002 net earnings and earnings per diluted share were $82.8 million and $0.61, respectively.

Year-to-date net sales of $3.1 billion increased 6.0 percent from the same period in 2002. Year-to-date same store sales increased 1.6 percent.

During the second quarter of 2003 Nordstrom did not open any stores. Three stores were opened in the month of August: a full-line store in Austin, Texas, and two Rack stores in Chicago, Ill. and Ft. Lauderdale, Fla. Throughout the remainder of the year ending January 31, 2004, Nordstrom expects to open two full-line stores in Richmond, Va. and West Palm Beach, Fla. Gross square footage for the year is expected to increase approximately 4.0 percent, from 18,428,000 to 19,109,000.

                               NORDSTROM, INC.
              CONSOLIDATED STATEMENTS OF EARNINGS - 2nd Quarter
   (unaudited; amounts in thousands, except per share data and percentages)

                         Quarter       % of sales    Quarter      % of sales
                          ended        (except as     ended       (except as
                         8/2/03        indicated)    7/31/02      indicated)
    Net sales          $1,794,975         100.0     $1,655,528       100.0
    Cost of sales
     and related
     buying &
     occupancy         (1,192,195)        (66.4)    (1,104,035)      (66.7)
    Gross profit          602,780          33.6        551,493        33.3
    Selling, general
     and
     administrative
     expenses            (504,656)        (28.1)      (496,915)     (30.0)
    Operating income       98,124           5.5         54,578        3.3
    Interest expense,
     net                  (26,134)         (1.5)       (19,605)      (1.2)
    Minority interest
     purchase                   -             -        (11,121)      (0.6)
    Service charge
     income and other,
     net                   36,081           2.0         35,341        2.1
    Earnings before
     income taxes         108,071           6.0         59,193        3.6
    Income tax
     expense              (42,200)        (39.0)(3)    (22,858)     (38.6)(3)
    Net earnings          $65,871           3.7        $36,335        2.2
    Earnings per
     share
        Basic               $0.48                        $0.27
        Diluted             $0.48                        $0.27