UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) February 21, 2006 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): ___ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ___ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ___ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition On February 23, 2006, Nordstrom, Inc. issued an earnings release announcing its results of operations for the quarter and year ended January 28, 2006, its financial position as of January 28, 2006, and its cash flows for the year ended January 28, 2006. A copy of this earnings release is attached as Exhibit 99.1. ITEM 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers On February 22, 2006, Nordstrom, Inc. issued a press release announcing the appointment of Philip G. Satre to its Board of Directors, effective February 21, 2006. A copy of this press release is attached as Exhibit 99.2. There are no arrangements or understandings between Mr. Satre and any other person pursuant to which Mr. Satre was appointed to the Board of Directors. Mr. Satre and the Company are not parties to any transaction requiring disclosure under Item 404(a) of Regulation S-K. ITEM 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year On February 21, 2006, in conjunction with the appointment of Mr. Philip Satre to the Board of Directors, Nordstrom, Inc.'s Board of Directors unanimously approved an amendment to the Company's bylaws to increase the number of directors from nine to ten. ITEM 7.01 Regulation FD Disclosure On February 23, 2006, Nordstrom, Inc. issued an earnings release announcing its results of operations for the quarter and year ended January 28, 2006, its financial position as of January 28, 2006, and its cash flows for the year ended January 28, 2006. A copy of this earnings release is attached as Exhibit 99.1. ITEM 9.01 Financial Statements and Exhibits 99.1 Nordstrom earnings release dated February 23, 2006 relating to the Company's results of operations for the quarter and year ended January 28, 2006, its financial position as of January 28, 2006, and its cash flows for the year ended January 28, 2006. 99.2 Nordstrom press release dated February 22, 2006 announcing the appointment of Philip Satre to the Company's Board of Directors. 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/ Michael G. Koppel ----------------------- Michael G. Koppel Executive Vice President and Chief Financial Officer Dated: February 23, 2006 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 99.1 Nordstrom earnings release dated February 23, 2006 relating to the Company's results of operations for the quarter and year ended January 28, 2006, its financial position as of January 28, 2006, and its cash flows for the year ended January 28, 2006. 99.2 Nordstrom press release dated February 22, 2006 announcing the appointment of Philip Satre to the Company's Board of Directors.
Exhibit 99.1 For Immediate Release - --------------------- February 23, 2006 NORDSTROM REPORTS FOURTH QUARTER EARNINGS PER SHARE OF 69 CENTS SEATTLE - February 23, 2006 - Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $190.4 million, or $0.69 per diluted share, for the fourth quarter ended January 28, 2006. For the same period last year, net earnings and earnings per diluted share were $140.0 million and $0.50, respectively. Total sales for the fourth quarter of 2005 increased 9.3 percent, to $2.3 billion, compared to sales of $2.1 billion in the same period last year. Fourth quarter same-store sales increased 5.8 percent. FOURTH QUARTER HIGHLIGHTS Net earnings increased 36 percent in the fourth quarter compared to the same quarter last year, reflecting strong sales momentum and ongoing operating improvements. The company remains committed to providing a differentiated shopping experience and delivering superior long-term financial performance. - - Same-store sales increased 5.8 percent for the quarter, higher than the company's one to three percent same-store sales guidance. Continued improvement in regular price sales throughout the quarter and a successful Men's Half-Yearly clearance event drove the sales increase. - - Gross profit, as a percent of sales, increased 81 basis points. This improvement was a result of sales leverage on buying and occupancy costs. - - The same-store sales increase combined with expense control resulted in a 70 basis point reduction in selling, general and administrative expenses on a percent to sales basis. FULL YEAR RESULTS For the fiscal year ended January 28, 2006, net earnings increased 40 percent to $551.3 million compared to net earnings of $393.5 million for the same period last year. Earnings per share for the same periods were $1.98 and $1.38, respectively. Total sales for the year increased 8.3 percent to $7.7 billion compared to prior year sales of $7.1 billion. Same-store sales increased 6.0 percent. EXPANSION UPDATE During the fourth quarter Nordstrom opened one full-line store in Dallas, Texas at The North Park Center. Gross square footage for the year has increased approximately 3.5 percent, from 19,397,000 to 20,070,000. On March 10, 2006, the company plans to open one store at The Gardens Mall in Palm Beach, Fla. SHARE REPURCHASE Nordstrom repurchased approximately 1.1 million shares of its common stock during the fourth quarter for $40.8 million. This reduction in weighted average shares outstanding had no effect on diluted earnings per share for the quarter. 2006 OUTLOOK For the fiscal year ending February 3, 2007, the company anticipates diluted earnings per share in the range of $2.15 to $2.23, which includes an estimated expense of $0.06 per diluted share from the adoption of SFAS No. 123(R) regarding expensing of stock options. For the first quarter, the company expects low single digit same-store sales growth and earnings per share in the range of $0.39 to $0.44. CONFERENCE CALL INFORMATION: Company management will be hosting a conference call and webcast to discuss fourth quarter results at 4:15p.m. (ET) 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 888-562-4353. 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 155 US stores located in 27 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 98 full-line stores, 49 Nordstrom Racks, five Faconnable boutiques, one free-standing shoe store, and two clearance stores. Nordstrom also operates 32 international Faconnable boutiques in Europe. Additionally, Nordstrom serves customers through its online presence at http://www.nordstrom.com and through its catalogs. Nordstrom, Inc. is publicly traded on the NYSE under the symbol JWN. 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 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 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, the company's ability to predict fashion trends, consumer apparel buying patterns, trends in personal bankruptcies and bad debt write-offs, changes in interest rates, employee relations, the company's ability to continue its expansion plans, changes in government or regulatory requirements, the company's ability to control costs, weather conditions and hazards of nature. 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. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances. Investor Contact: Media Contact: RJ Jones, 206-303-3007 Brooke White, 206-373-3030 NORDSTROM, INC. CONSOLIDATED STATEMENTS OF EARNINGS - 4th Quarter (unaudited; amounts in thousands, except per share data and percentages) ADDITIONAL DATA - --------------- Weighted average shares outstanding
Quarter % of sales(1) Quarter % of sales ended (except as ended (except as 1/28/06 indicated) 1/29/05 indicated) ------ --------- ------ --------- Net sales $2,295,818 100.0% $2,100,343 100.0% Cost of sales and related buying & occupancy costs (1,435,891) (62.5%) (1,330,656) (63.4%) --------- --------- Gross profit 859,927 37.5% 769,687 36.6% Selling, general and administrative expenses (602,280) (26.2%) (565,497) (26.9%) -------- -------- Operating income 257,647 11.2% 204,190 9.7% Interest expense, net (11,509) (0.5%) (13,168) (0.6%) Other income including finance charges, net 61,302 2.7% 45,453 2.2% -------- -------- Earnings before income taxes 307,440 13.4% 236,475 11.3% Income tax expense (117,010) (38.1%)(2) (96,495) (40.8%)(2) -------- -------- Net earnings $190,430 8.3% $139,980 6.7% ======== ======== Earnings per share Basic $ 0.71 $ 0.51 Diluted $ 0.69 $ 0.50 (1)Subtotals and totals may not foot due to rounding. (2)Percent of earnings before income taxes.
Basic 269,783 274,889 Diluted 275,662 280,641 NORDSTROM, INC. CONSOLIDATED STATEMENTS OF EARNINGS - Full Year (unaudited; amounts in thousands, except per share data and percentages) ADDITIONAL DATA - --------------- Weighted average shares outstanding
Year % of sales(1) Year % of sales ended (except as ended (except as 1/28/06 indicated) 1/29/05 indicated) ------ --------- ------ --------- Net sales $7,722,860 100.0% $7,131,388 100.0% Cost of sales and related buying & occupancy costs (4,888,023) (63.3%) (4,559,388) (63.9%) --------- --------- Gross profit 2,834,837 36.7% 2,572,000 36.1% Selling, general and administrative expenses (2,100,666) (27.2%) (2,020,233) (28.3%) -------- -------- Operating income 734,171 9.5% 551,767 7.7% Interest expense, net (45,300) (0.6%) (77,428) (1.1%) Other income including finance charges, net 196,354 2.5% 172,942 2.4% -------- -------- Earnings before income taxes 885,225 11.5% 647,281 9.1% Income tax expense (333,886) (37.7%)(2) (253,831) (39.2%)(2) -------- -------- Net earnings $551,339 7.1% $393,450 5.5% ======== ======== Earnings per share Basic $ 2.03 $ 1.41 Diluted $ 1.98 $ 1.38 (1)Subtotals and totals may not foot due to rounding. (2)Percent of earnings before income taxes.
Basic 271,958 278,993 Diluted 277,776 284,533 NORDSTROM, INC. CONSOLIDATED BALANCE SHEETS (unaudited; amounts in thousands)
1/28/06 1/29/05 ------- ------- Assets Current assets Cash and cash equivalents $ 462,656 $ 360,623 Short-term investments 54,000 41,825 Accounts receivable, net 638,887 645,663 Investment in asset backed securities 561,136 422,416 Merchandise inventories 955,978 917,182 Current deferred tax assets 145,470 131,547 Prepaid expenses and other 55,358 53,188 ------ ------ Total current assets 2,873,485 2,572,444 Land, buildings and equipment, net 1,773,871 1,780,366 Goodwill 51,714 51,714 Tradename 84,000 84,000 Other assets 137,607 116,866 ------- ------- Total assets $4,920,677 $4,605,390 ---------- ---------- Liabilities and Shareholders'Equity Current liabilities Accounts payable $ 540,019 $ 482,394 Accrued salaries, wages and related benefits 285,982 287,904 Other current liabilities 408,404 354,201 Income taxes payable 81,617 115,556 Current portion of long-term debt 306,618 101,097 ------- ------- Total current liabilities 1,622,640 1,341,152 Long-term debt, net 627,776 929,010 Deferred property incentives, net 364,382 367,087 Other liabilities 213,198 179,147 Shareholders' equity: Common stock, no par value: 1,000,000 shares authorized; 269,549 and 271,331 shares issued and outstanding 685,934 552,655 Unearned stock compensation (327) (299) Retained earnings 1,404,366 1,227,303 Accumulated other comprehensive earnings 2,708 9,335 ----- ----- Total shareholder's equity 2,092,681 1,788,994 --------- --------- Total liabilities and shareholders' equity $4,920,677 $4,605,390 ---------- ---------- NORDSTROM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; amounts in thousands)
Year Ended Year Ended 1/28/06 1/29/05 ------- ---------- Operating Activities Net earnings $551,339 $393,450 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of buildings and equipment 276,328 264,769 Amortization of deferred property incentives and other, net (33,350) (31,378) Stock-based compensation expense 13,285 8,051 Deferred income taxes, net (11,238) (8,040) Tax benefit of stock option exercises and employee stock purchases 41,092 25,442 Provision for bad debt 20,918 24,639 Change in operating assets and liabilities: Accounts receivable (15,140) (2,950) Investment in asset backed securities (135,790) (149,970) Merchandise inventories (20,804) (11,771) Prepaid expenses (1,035) (3,163) Other assets (3,473) (8,143) Accounts payable 31,721 23,930 Accrued salaries, wages and related benefits (11,284) 15,055 Other current liabilities 38,755 58,471 Income taxes payable (33,877) (18,999) Property incentives 49,480 19,837 Other liabilities 19,305 7,116 ------ ----- Net cash provided by operating activities 776,232 606,346 ------- ------- Investing Activities Capital expenditures (271,659) (246,851) Proceeds from sale of assets 107 5,473 Purchases of short-term investments (542,925) (3,232,250) Sales of short-term investments 530,750 3,366,425 Other, net (8,366) (2,830) ------ ----- Net cash used in investing activities (292,093) (110,033) ------- ------- Financing Activities Principal payments on long-term debt (101,047) (205,252) Increase (decrease) in cash book overdrafts 4,946 (2,680) Proceeds from exercise of stock options 73,023 87,061 Proceeds from employee stock purchase plan 15,600 12,892 Cash dividends paid (87,196) (67,240) Repurchase of common stock (287,080) (300,000) Other, net (352) (752) --- --- Net cash used in financing activities (382,106) (475,971) ------- ------- Net increase in cash and cash equivalents 102,033 20,342 Cash and cash equivalents at beginning of year 360,623 340,281 ------- ------- Cash and cash equivalents at end of year $462,656 $360,623 -------- --------
Exhibit 99.2 For Immediate Release February 22, 2006 NORDSTROM ANNOUNCES INCREASE OF QUARTERLY DIVIDEND AND APPOINTS PHILIP G. SATRE, FORMER CEO OF HARRAH'S ENTERTAINMENT TO THE BOARD OF DIRECTORS SEATTLE - February 22, 2006 - Nordstrom, Inc.'s (NYSE: JWN) board of directors announced yesterday that it has approved a quarterly dividend of $0.105 per share, an increase of 24% or $0.02 per share. This cash dividend is payable on March 15, 2006, to shareholders of record on February 28, 2006. The board also announced the addition of Philip G. Satre, retired Chairman of the Board and former CEO of Harrah's Entertainment, Inc. Mr. Satre worked for Harrah's for nearly 25 years. Well-respected in his field, Mr. Satre has received many honors and awards for his business and humanitarian efforts. "We are pleased that Philip Satre has agreed to join our board," said Bruce Nordstrom, Chairman of the Board, Nordstrom, Inc. "Philip will be a strong resource for our company with his terrific track record in business and leadership." Mr. Satre also serves on several corporate and non-profit boards, including Rite Aid Corporation, the Nevada Cancer Institute, the National D-Day Museum Foundation board of trustees, the UC Davis School of Law Alumni Association board and the Stanford University board of trustees. Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 155 US stores located in 27 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 98 full-line stores, 49 Nordstrom Racks, five Faconnable boutiques, one free-standing shoe store, and two clearance stores. Nordstrom also operates 32 international Faconnable boutiques in Europe. Additionally, Nordstrom serves customers through its online presence at http://www.nordstrom.com and through its catalogs. Nordstrom, Inc. is publicly traded on the NYSE under the symbol JWN. Investor Contact: RJ Jones, 206-303-3007 Media Contact: Deniz Anders, 206-373-3038