- --------------------------------------------------------------------------- ------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------------------------------- FORM 8-K ----------------------------------------------------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE THE SECURITIES EXCHANGE ACT OF 1934 ------------------------------------------------------------ DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) FEBRUARY 19, 2004 ------------------------------------------------------------ NORDSTROM, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------------------------------------------ WASHINGTON 001-15059 91-0515058 (STATE OR OTHER JURISDICTION (COMMISSION FILE (I.R.S. EMPLOYER OF INCORPORATION) NUMBER) IDENTIFICATION NO.) 1617 SIXTH AVENUE, SEATTLE, WASHINGTON 98101 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) ----------------------------------------------------------- REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (206) 628-2111 ------------------------------------------------------------ INAPPLICABLE (FORMER NAME OR FORMER ADDRESS IF CHANGED SINCE LAST REPORT) ---------------------------------------------------------------------- ------------------------------------------------- ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS (C) EXHIBITS 99.1 Nordstrom earnings release dated February 19, 2004 relating to the Company's results of operations for the quarter and year ended January 31, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 19, 2004, Nordstrom, Inc. issued a press release announcing its results of operations for the quarter and year ended January 31, 2004. A copy of this press release is attached as Exhibit 99.1. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NORDSTROM, INC. By: /s/ David L. Mackie ----------------------- David L. Mackie Vice President and Corporate Secretary Dated: February 19, 2004 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 99.1 Nordstrom earnings release dated February 19, 2004 relating to the Company's results of operations for the quarter and year ended January 31, 2004.
Exhibit 99.1 For Immediate Release - --------------------- February 19, 2004 NORDSTROM FOURTH QUARTER EARNINGS INCREASE 74 PERCENT ----------------------------------------------------- SEATTLE - February 19, 2004 - Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $104.3 million, or $0.74 per diluted share, for the fourth quarter of 2003, which ended January 31, 2004. For the same period last year, net earnings and earnings per diluted share were $60.0 million and $0.44, respectively. On a comparable 4-5-4 basis, total sales for the fourth quarter of 2003 increased 12.0 percent, to $1.9 billion, compared to sales of $1.7 billion in the same period last year. Fourth quarter 2003 same-store sales increased 8.5 percent. FOURTH QUARTER HIGHLIGHTS The company's key strategic initiatives continue to generate operating improvements, resulting in a 74 percent increase in fourth quarter earnings compared to the prior year. - Same-store sales increased 8.5 percent; better than the company's plan of a two to four percent increase. - Gross profit improved 350 basis points, driven by strong sell through and significant improvement in markdowns. - Selling, general and administrative expenses increased 50 basis points as a result of higher than expected performance based incentive compensation expense. All other expense components continue to trend favorably, collectively improving 100 basis points. FULL YEAR RESULTS Fiscal 2003 net earnings and earnings per share for the period ended January 31,2004, were $242.8 million and $1.76, respectively, compared to net earnings and earnings per share of $90.2 million and $0.66 for the same period in fiscal 2002. Excluding $71.0 million (net of tax) in non-recurring and impairment charges (1),fiscal 2002 net earnings and earnings per diluted share were $161.3 million and $1.19, respectively. 2003 earnings increased 51 percent over 2002, excluding non-recurring and impairment charges, reflecting continuing improvement in all key areas of the business. Ongoing refinement of the merchandise assortments, coupled with better disciplines in inventory planning and control, have resulted in stores having more of the right merchandise. The company saw the strongest comp-store sales and gross margin performance in ten years, and expenses improved on a percent to sales basis for the third consecutive year. On a comparable 4-5-4 basis, 2003 total sales of $6.5 billion increased 8.6 percent from the same period in 2002. Full year same-store sales increased 4.3 percent. GAAP SALES PERFORMANCE The additional information provided in this section is to comply with the Securities and Exchange Commission's Regulation G. The Company converted to a 4-5-4 Retail Calendar at the beginning of 2003. This change in the fiscal calendar has resulted in differences in the number of days included in the current period versus the same period in the prior year. Sales performance numbers included in this sales release have been calculated on a comparative 4-5-4 basis. The Company believes that adjusting for these differences provides a more comparable basis (4-5-4 vs. 4-5-4) from which to evaluate sales performance. The following reconciliation bridges 2002 GAAP sales to the 4-5-4 comparable sales.
Dollar % Change % Change Sales Reconciliation ($M) QTD 2003 QTD 2002 Increase Total Sales Comp Sales -------- -------- ---------- ----------- ---------- Number of Days GAAP 91 92 GAAP Sales $1,932.5 $1,750.6 $181.9 10.4% 7.0% Less Nov. 1-2, 2002 sales -- ($43.7) Plus Feb. 1, 2003 sales -- $18.2 Reported 4-5-4 sales $1,932.5 $1,725.1 $207.4 12.0% 8.5% ======== ======== 4-5-4 Adjusted Days 91 91 EXPANSION UPDATE During fiscal 2003 Nordstrom opened four full-line stores and two Rack stores. Gross square footage for the year increased approximately 4.0 percent, from 18,428,000 to 19,138,000. 2004 OUTLOOK The company is providing the following 2004 forecasts:
Dollar % Change % Change Sales Reconciliation ($M) FY 2003 FY 2002 Increase Total Sales Comp Sales -------- -------- ---------- ----------- ---------- Number of Days GAAP 365 365 GAAP Sales $6,491.7 $5,975.1 $516.6 8.6% 4.1% Less Feb. 1, 2003 ($18.2) - Less Feb. 1-2, 2002 sales -- ($30.9) Plus Feb. 1, 2003 sales -- $18.2 Reported 4-5-4 sales $6,473.5 $5,962.4 $511.1 8.6% 4.3% ======== ======== 4-5-4 Adjusted Days 364 364 Note: First quarter projections include a $16 to $18 million increase in Interest expense related to the previously announced debt retirement scheduled to take place during the first quarter. This additional expense will lower first quarter earnings per share approximately $0.08. This debt retirement will lower future interest expense resulting in approximately $0.02 of earnings benefit in each subsequent quarter.
1st Quarter 2004 Full-Year 2004 ---------------- -------------- Comp-store Sales 4%-6% increase 1%-3% increase Gross Profit (%) Significant improvement 30-50 basis point increase Selling, General and Administrative Expense (%) Moderate improvement 50-70 basis point decrease Service Charge Income $3-$5 million increase $7-$9 million increase Interest Expense (see note below) $16-$18 million increase $11-$13 million decrease Effective Tax Rate 39% 39% Earnings per Share $0.23 - $0.28 $2.02 - $2.08 Diluted Shares Outstanding Approx. 142 million Approx. 143 million Prior Year Diluted EPS $0.20 $1.76 CONFERENCE CALL INFORMATION: Company management will be hosting a conference call and webcast to discuss fourth quarter results at 4:30pm (EST) today. Access to the conference call is open to the press and general public in a listen only mode. To participate, please dial, 212-547-0138 ten minutes prior to the call (passcode: NORD). A telephone replay will be available for 48 hours beginning approximately one hour after the conclusion of the call by dialing 800-839-4519. Interested parties may also access the call over the Internet by visiting the Investor Relations section of the company's corporate website at http://about.nordstrom.com/aboutus/investor/webcasts.asp. An archived version - -------------------------------------------------------- of the webcast will be available at this location for 30 days. Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 148 US stores located in 27 states. Founded in 1901 as a shoe store in Seattle, Nordstrom today operates 92 full-line stores, 49 Nordstrom Racks, five U.S. Faconnable boutiques, one freestanding shoe store, and one clearance store. Nordstrom also operates 31 international Faconnable boutiques, primarily in Europe. Additionally, Nordstrom Direct serves customers through its online presence at http://www.nordstrom.com and through its direct mail ------------------------ catalogs. Certain statements in this news release contain "forward-looking" information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risks and uncertainties, including anticipated results, store openings and distribution channels, planned capital expenditures, and trends in company operations. Actual future results and trends may differ materially from historical results or current expectations depending upon factors including, but not limited to, the company's ability to predict fashion trends, consumer apparel buying patterns, the company's ability to control costs, weather conditions, hazards of nature such as earthquakes and floods, trends in personal bankruptcies and bad debt write-offs, changes in interest rates, employee relations, the company's ability to continue its expansion plans, and the impact of economic and competitive market forces, including the impact of terrorist activity or the impact of a war on the company, its customers and the retail industry. Our SEC reports may contain other information on these and other factors that could affect our financial results and cause actual results to differ materially from any forward-looking information we may provide. NORDSTROM, INC. CONSOLIDATED STATEMENTS OF EARNINGS - 4th Quarter ------------------------------------------------- (unaudited; amounts in thousands, except per share data and percentages)
Quarter % of sales Quarter % of sales ended (except as ended (except as 1/31/04 indicated) 1/31/03 indicated) ------ --------- ------ --------- Net sales $1,932,549 100.0 $1,750,586 100.0 Cost of sales and related buying & occupancy (1,221,988) (63.2) (1,167,682) (66.7) --------- --------- Gross profit 710,561 36.8 582,904 33.3 Selling, general and administrative expenses (562,407) (29.1) (500,461) (28.6) -------- -------- Operating income 148,154 7.7 82,443 4.7 Interest expense, net (17,909) (0.9) (21,435) (1.2) Service charge income and other, net 40,801 2.1 37,326 2.1 -------- -------- Earnings before income taxes 171,046 8.9 98,334 5.6 Income tax expense (66,700) (39.0)(2) (38,300) (38.9)(2) -------- -------- Net earnings $104,346 5.4 $60,034 3.4 ======== ======== Earnings per share Basic $ 0.76 $ 0.44 Diluted $ 0.74 $ 0.44 ADDITIONAL DATA - --------------- Average number of shares outstanding NORDSTROM, INC. CONSOLIDATED STATEMENTS OF EARNINGS - Full Year ----------------------------------------------- (unaudited; amounts in thousands, except per share data and percentages)
Basic 137,599 135,438 Diluted 140,690 135,838 ADDITIONAL DATA - --------------- Average number of shares outstanding
Year-to-Date % of sales Year-to-Date % of sales ended (except as ended (except as 1/31/04 indicated) 1/31/03 indicated) ------ --------- -------- --------- Net sales $6,491,673 100.0 $5,975,076 100.0 Cost of sales and related buying & occupancy (4,213,955) (64.9) (3,966,959) (66.4) ---------- ---------- Gross profit 2,277,718 35.1 2,008,117 33.6 Selling, general and administrative expenses (1,943,715) (30.0) (1,818,381) (30.4) ---------- -------- Operating income 334,003 5.1 189,736 3.2 Interest expense, net (90,952) (1.4) (81,921) (1.4) Minority interest purchase - - (53,168) (0.9) Service charge income and other, net 155,090 2.4 140,977 2.4 ------- -------- Earnings before income taxes and cumulative effect of accounting change 398,141 6.1 195,624 3.3 Income tax expense (155,300) (39.0)(2) (92,041) (47.0)(2) -------- -------- Earnings before cumulative effect of accounting change 242,841 3.7 103,583 1.7 Cumulative effect of accounting change (net of $8,541 tax) - - (13,359) (0.2) -------- -------- Net earnings $242,841 3.7 $90,224 1.5 ======== ======== Earnings per share Basic $1.78 $ 0.67 Diluted $1.76 $ 0.66 Investor Contact: Media Contact: Stephanie Allen, 206-303-3262 Shasha Richardson, 206-373-3038
Basic 136,329 135,107 Diluted 137,739 135,724 (1) Prior year-to-date net earnings excluding non-recurring and impairment charges is the sum of net earnings of $90,224, the cumulative effect of accounting change of $13,359 (net of tax), non-recurring minority interest purchase and reintegration costs of $48,184 (net of tax) and the write-down of the investment in a supply chain tool of $9,498 (net of tax). (2) Percent of earnings before income taxes. For quarter-to-date and year-to-date 2003, income tax expense as a percent of earnings before income taxes is higher than Nordstrom's effective tax rate as the Company did not recognize a tax benefit from certain costs related to the minority interest purchase.