Nordstrom’s Q4 Profits Climb 35%

Nordstrom, Inc. reported net earnings of $232 million,
or $1.04 per diluted share, for the fourth quarter ended January 29,
2011. This represented an increase of 35% compared with net
earnings of $172 million, or 77 cents per diluted share, for the same
quarter last year.

Fourth quarter same-store sales increased 6.7% compared with the
same period in fiscal 2009. Net sales in the fourth quarter were $2.82
billion, an increase of 10.9% compared with net sales of $2.54
billion during the same period in fiscal 2009. Additionally, total net
sales of $9.31 billion for fiscal 2010 were the highest in the company's
history.

FOURTH QUARTER SUMMARY

Nordstrom's fourth quarter performance was a continuation of the
positive trends experienced during 2010.

• 
  Multi-channel same-store sales increased 7.2% compared with the
  same period in fiscal 2009. Top-performing multi-channel merchandise
  categories included jewelry, dresses and shoes. The South and Midwest
  regions were the top-performing geographic areas for full-line stores
  relative to the fourth quarter of 2009.
  
• 
  Nordstrom Rack net sales increased $93 million, or 24.1% compared with the same period in fiscal 2009. Same-store sales
  increased 3.9% compared with the same period in fiscal 2009.
  
• 
  Gross profit, as a percentage of net sales, increased 34 basis points
  compared with last year's fourth quarter. The improvement was mainly
  driven by the ability to leverage buying and occupancy expenses during
  the quarter. The company ended the quarter with sales per square foot
  up 6.0% and inventory per square foot up 3.8% compared
  with the fourth quarter of 2009. Nordstrom ended the year with
  inventory turn of 5.6, an all-time high for the company.
  
• 
  Retail selling, general and administrative expenses increased $66
  million compared with last year's fourth quarter. Higher sales volume
  and new stores accounted for the majority of this increase, with the
  remainder coming primarily from increased investments in marketing and
  technology. The company continues to make investments to improve the
  customer experience both online and within the stores.
  
• 
  The Credit segment continues to improve. Customer payment rates are
  increasing, resulting in improved delinquency and write-off trends.
  Delinquencies as a percentage of credit card receivables at the end of
  the fourth quarter were 3.0%, which was reduced from 3.5% at the end of the third quarter of 2010 and reduced from 5.3%
  at the end of the fourth quarter of 2009. As a result, the
  reserve for bad debt was reduced by $15 million.
  
• 
  Earnings before interest and taxes increased $96 million to $406
  million, or 13.9% of total revenues, from $310 million, or 11.8%  of total revenues, in last year'fourth quarter.
  

FULL YEAR RESULTS

For the fiscal year ended January 29, 2011, net earnings were up $172
million to $613 million, an increase of 39% compared with net
earnings of $441 million for the fiscal year ended January 30, 2010.
Earnings per diluted share for the same periods were $2.75 and $2.01,
respectively.

Full year same-store sales increased 8.1% compared with fiscal
2009. Net sales for the year were a record $9.31 billion, an increase of
12.7%  compared with prior year net sales of $8.26 billion.

CAPITAL INVESTMENT AND EXPANSION UPDATE

In fiscal 2011, the company's capital expenditures, net of property
incentives, are expected to total between $400 and $440 million,
compared with approximately $304 million in fiscal 2010.

During the fourth quarter of 2010, the company opened a
36,000-square-foot Nordstrom Rack store at Arrowhead Crossing in Peoria,
Arizona. In 2011, Nordstrom has announced plans to open the following
stores:

¹Nordstrom plans to relocate its Nordstrom Rack store at
Flatiron Marketplace in Broomfield, Colorado to the Twenty Ninth Street
shopping center in Boulder, Colorado.

²Nordstrom plans to relocate its Nordstrom Rack store at
Silverado Ranch Plaza in Las Vegas, Nevada to Stephanie Street
Center in Henderson, Nevada.

FISCAL YEAR 2011 OUTLOOK

In fiscal 2011, Nordstrom plans to build from its strong financial
framework to improve profitability, enhance free cash flow, increase
return on invested capital and maintain a healthy balance sheet. For the
2011 fiscal year, Nordstrom expects same-store sales to increase 2% to 4%, which yields earnings per share in the range of $2.95 to $3.10
for the full year.

The company's expectations for fiscal 2011 are as follows: