Nordstrom, Inc. reported net earnings of $105.0 million, or 48 cents per diluted share, for the second quarter ended August 1, 2009. For the same quarter last year, Nordstrom reported net earnings of $143.0 million, or 65 cents per diluted share.
Net sales in the second quarter were $2.14 billion, a decrease of 6.2% compared with sales of $2.29 billion during the same period in fiscal 2008. Second quarter same-store sales decreased 9.8% compared with the same period in fiscal 2008.
SECOND QUARTER SUMMARY
The companys second quarter typically is the second largest of the year in terms of net sales, containing three of the companys five annual sales events: Half-Yearly Sale for Women and Kids, Half-Yearly Sale for Men, and the Anniversary Sale. For the second quarter, solid execution of the Anniversary sale combined with disciplined inventory and expense management allowed the company to exceed its earnings plans.
Full-line same-store sales in the second quarter decreased 12.3% and sales for Nordstrom Direct increased 3.5% compared with the same period in fiscal 2008. Sales performance during the Anniversary event was better than expected at negative 6.6% for full-line stores compared with the Anniversary event last year. For the second quarter, top-performing merchandise categories for full-line stores and Nordstrom Direct combined were Dresses, Kids Shoes and Apparel, and Fashion Jewelry, while the South and Mid-Atlantic regions were the top-performing geographic areas for full-line stores.
Credit selling, general and administrative expenses increased $20 million compared with last years second quarter primarily due to higher charge-offs.
In the third quarter of 2009, Nordstrom plans to open a 138,000-square-foot full-line store at Kenwood Towne Centre in Cincinnati, Ohio on September 25th. During the third quarter of 2009, Nordstrom also plans to open six Nordstrom Rack stores at the Shops of Southlake in Southlake, Texas; Arbor Lakes in Maple Grove, Minnesota; Beverly Connection in Los Angeles, California; Hastings Village in Pasadena, California; Westfield Oakridge in San Jose, California, and Gateway Center in Austin, Texas.
FISCAL YEAR 2009 OUTLOOK
The company is revising its outlook for the 2009 fiscal year to reflect the better than expected second quarter performance. For the 2009 fiscal year, Nordstrom expects earnings per diluted share in the range of $1.50 to $1.65, increased from the previous range of $1.25 to $1.50. The companys revised expectations for fiscal 2009 are as follows:
Same-store Sales 9 percent to 12 percent decrease
Credit Card Revenue $75 to $80 million increase
Gross Profit (%) 50 to 100 basis point decrease
Retail Selling, General and Admin. Expense ($) $100 to $150 million decrease
Credit Selling, General and Admin. Expense ($) $35 to $45 million increase
Total Selling, General and Admin. Expense (%) 80 to 100 basis point increase
Interest Expense, net $20 to $25 million increase
Effective Tax Rate 36.5 percent to 37.0 percent
Earnings per Diluted Share $1.50 to $1.65
Diluted Shares Outstanding 219 million
NEW REVOLVING CREDIT FACILITY
Nordstrom plans to enter into a new three-year $650 million unsecured revolving credit facility to replace the existing $650 million unsecured revolving credit facility which matures in November 2010. The new facility is intended to be used for general corporate purposes and will mature in August 2012. The closing is subject to satisfaction of customary closing conditions, including documentation. The company has obtained commitments from lenders for the new revolving credit facility of $650 million, which it intends to complete later this week.
CONSOLIDATED STATEMENTS OF EARNINGS 2nd Quarter
|(unaudited; amounts in millions, except per share data)|
|Credit card revenues||87||72|
|Cost of sales and related buying & occupancy costs||(1,418||)||(1,488||)|
|Selling, general and administrative expenses:|
|Retail stores, direct and other segments||(531||)||(545||)|
|Earnings before interest and income taxes||206||269|
|Interest expense, net||(36||)||(34||)|
|Earnings before income taxes||170||235|
|Income tax expense||(65||)||(92||)|
|Earnings per share|
|Weighted average shares outstanding|