SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 0-6074
Nordstrom, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Washington 91-0515058
_______________________________ ___________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1501 Fifth Avenue, Seattle, Washington 98101
____________________________________________________
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206) 628-2111
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES X NO
_____ _____
Common stock outstanding as of May 26, 1997: 76,985,204 shares of
common stock.
1 of 9
NORDSTROM, INC. AND SUBSIDIARIES
--------------------------------
INDEX
-----
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Statements of Earnings
Three months ended April 30, 1997
and 1996 3
Consolidated Balance Sheets
April 30, 1997 and 1996 and
January 31, 1997 4
Consolidated Statements of Cash Flows
Three months ended April 30, 1997
and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 6. Exhibits and Reports on Form 8-K 9
2 of 9
NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in thousands except per share amounts)
(unaudited)
Three Months
Ended April 30,
-------------------
1997 1996
-------- --------
Net sales $953,747 $905,962
Costs and expenses:
Cost of sales and related buying
and occupancy 646,512 617,112
Selling, general and administrative 274,287 268,787
Interest, net 7,510 9,394
Service charge income and other, net (27,911) (34,580)
-------- --------
Total costs and expenses 900,398 860,713
-------- --------
Earnings before income taxes
and extraordinary item 53,349 45,249
Income taxes 21,000 17,900
-------- --------
Earnings before extraordinary item 32,349 27,349
Extraordinary charge related to the
early extinguishment of debt, net
of income taxes of $900 --- 1,452
-------- --------
Net earnings $ 32,349 $ 25,897
======== ========
Earnings before extraordinary item
per average share of common stock
outstanding $ .41 $ .34
======== ========
Net earnings per average share of
common stock outstanding $ .41 $ .32
======== ========
Cash dividends paid per share of
common stock outstanding $ .125 $ .125
======== ========
These statements should be read in conjunction with the Notes to
Consolidated Financial Statements contained herein and in the Nordstrom
1996 Annual Report to Shareholders.
3 of 9
NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
April 30, January 31, April 30,
1997 1997 1996
---------- ---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 49,066 $ 28,284 $ 33,426
Accounts receivable, net 661,284 714,589 864,137
Merchandise inventories 823,609 719,919 731,647
Prepaid income taxes and other 68,612 69,607 67,759
---------- ---------- ----------
Total current assets 1,602,571 1,532,399 1,696,969
Property, buildings and
equipment, net 1,184,278 1,152,454 1,109,287
Other assets 18,010 17,654 16,943
---------- ---------- ----------
TOTAL ASSETS $2,804,859 $2,702,507 $2,823,199
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 194,040 $ 163,770 $ 303,423
Accounts payable 398,748 310,430 356,965
Accrued salaries, wages
and taxes 154,086 192,750 141,304
Accrued expenses 49,973 56,080 51,487
Accrued income taxes 21,489 13,045 18,282
Current portion
of long-term debt 101,303 51,302 74,210
---------- ---------- ----------
Total current liabilities 919,639 787,377 945,671
Long-term debt 371,469 329,330 322,440
Deferred lease credits and
other deferred items 111,820 112,608 111,121
Shareholders' Equity:
Common stock, no par:
250,000,000 shares authorized;
77,145,937, 79,634,977 and
81,256,947 shares issued
and outstanding 184,607 183,398 176,596
Retained earnings 1,217,324 1,289,794 1,267,371
---------- ---------- ----------
Total shareholders' equity 1,401,931 1,473,192 1,443,967
---------- ---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,804,859 $2,702,507 $2,823,199
========== ========== ==========
These statements should be read in conjunction with the Notes to
Consolidated Financial Statements contained herein and in the Nordstrom
1996 Annual Report to Shareholders.
4 of 9
NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three Months
Ended April 30,
---------------------
1997 1996
-------- --------
OPERATING ACTIVITIES:
Earnings before extraordinary item $ 32,349 $ 27,349
Adjustments to reconcile earnings
to net cash provided by
operating activities:
Extraordinary charge related to the
early extinguishment of debt, net
of income taxes of $900 --- (1,452)
Depreciation and amortization 36,646 38,080
Change in:
Accounts receivable, net 53,305 29,790
Merchandise inventories (103,690) (105,344)
Prepaid income taxes and other 995 270
Accounts payable 88,318 79,381
Accrued salaries, wages and taxes (38,664) (44,236)
Accrued expenses (6,107) 3,653
Income tax liabilities 8,368 1,190
Deferred lease credits (712) 1,969
-------- --------
Net cash provided by operating activities 70,808 30,650
-------- --------
INVESTING ACTIVITIES:
Additions to property, buildings
and equipment, net (68,307) (43,548)
Other (5) (920)
-------- --------
Net cash used in investing activities (68,312) (44,468)
-------- --------
FINANCING ACTIVITIES:
Increase in notes payable 30,270 70,922
Proceeds from issuance of long-term debt, net 91,836 ---
Principal payments on long-term debt (210) (43,293)
Proceeds from issuance of common stock 1,209 8,156
Cash dividends paid (9,908) (10,141)
Purchase and retirement of common stock (94,911) (2,917)
-------- --------
Net cash provided by financing activities 18,286 22,727
-------- --------
Net increase in cash and cash equivalents 20,782 8,909
Cash and cash equivalents at
beginning of period 28,284 24,517
-------- --------
Cash and cash equivalents at end of period $ 49,066 $ 33,426
======== ========
These statements should be read in conjunction with the Notes to
Consolidated Financial Statements contained herein and in the Nordstrom
1996 Annual Report to Shareholders.
5 of 9
NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED APRIL 30, 1997 AND 1996
(dollars in thousands)
(unaudited)
Note 1:
The consolidated balance sheets of Nordstrom, Inc. and subsidiaries (the
"Company") as of April 30, 1997 and 1996, and the related consolidated
statements of earnings and cash flows for the periods then ended, have
been prepared from the accounts without audit.
The consolidated financial information is applicable to interim periods
and is not necessarily indicative of the results to be expected for the
year ending January 31, 1998.
It is not considered necessary to include detailed footnote information
as of April 30, 1997 and 1996. The financial information should be read
in conjunction with the Notes to Consolidated Financial Statements
contained in the Nordstrom 1996 Annual Report to Shareholders.
In the opinion of management, the consolidated financial information
includes all adjustments (consisting only of normal, recurring
adjustments) necessary to present fairly the financial position of
Nordstrom, Inc. and subsidiaries as of April 30, 1997 and 1996, and the
results of their operations and cash flows for the periods then ended,
in accordance with generally accepted accounting principles applied on a
consistent basis.
Note 2:
During the first quarter of 1996, the Company elected to prepay $43,100 of
Nordstrom Credit, Inc. 9.375% sinking debentures in order to take advantage
of lower short-term interest rates. This resulted in an extraordinary charge
of $1,452, net of applicable income taxes of $900 ($0.02 per share).
Note 3: The summarized combined results of operations of Nordstrom
Credit, Inc. and Nordstrom National Credit Bank are
as follows:
Three Months Ended April 30, 1997 1996
------- -------
Total revenue $31,806 $39,212
Earnings before income taxes
and extraordinary item 11,643 13,531
Extraordinary charge related
to the early extinguishment
of debt, net of income taxes
of $900 --- 1,452
Net earnings 7,373 7,109
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED APRIL 30, 1997 AND 1996
(dollars in thousands)
(unaudited)
Note 4:
Statement of Financial Accounting Standards No. 128, which will be effective
for earnings per share calculations after December 15, 1997, will not
significantly affect the Company's earnings per share.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Management
Discussion and Analysis section of the Nordstrom 1996 Annual Report to
Shareholders.
Results of Operations:
- ----------------------
During the first quarter of 1997, sales increased 5.3% when compared with the
same quarter in 1996. Sales for comparable stores increased .5% during the
quarter, with the remainder of the increase coming from new units. The slight
increase in comparable store sales reflects a change from the decrease in the
fourth quarter of 1996.
Cost of sales and related buying and occupancy costs decreased as a percentage
of sales for the quarter as compared to the corresponding period in 1996.
Occupancy costs declined as no new stores were opened during the quarter, and
merchandise margins improved due to lower markdowns. These improvements were
partially offset by an increase in buying costs.
Selling, general and administrative expenses decreased as a percentage of
sales when compared to the same quarter in 1996. There were several factors
which contributed to this result. First, there were no major store openings
during the quarter, compared to two major store openings in the first quarter
of 1996. Second, bad debt expenses were lower because of the securitization
of the Company's VISA credit card receivables in August of last year. Third
expenses in more mature stores were well controlled.
Interest expense decreased as a percentage of sales when compared to the same
quarter in 1996 due primarily to lower levels of debt outstanding during the
quarter.
7 of 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)
Service charge income and other, net decreased as a percentage of sales for
the quarter when compared to the corresponding period in 1996 primarily due to
a reduction in revenues from the Company's VISA card program as a result of
the securitization of these receivables in August 1996. Also during the
quarter, the Company established a reserve of $2 million ($0.02 per share
after income taxes) for the estimated closing costs related to the closure of
its twelve leased shoe departments located in Hawaii and Guam, which is
scheduled for November 1997.
Financial Condition:
- --------------------
During the quarter, Nordstrom Credit, Inc. filed a shelf registration
statement on Form S-3 to register up to $250 million in debt securities, and
issued $92.4 million in medium-term notes under the registration.
In April, 1997, the Company completed its second repurchase of $100 million of
its outstanding common stock as approved by the Board of Directors at its
November 1996 meeting. To date, the Company has bought $24.6 million of a
third $100 million stock repurchase authorized in February, 1997.
During the quarter, the Company expanded two Rack stores in Southern
California. On May 9, a new Rack was opened at Factoria Mall in Bellevue,
Washington. Construction is progressing as planned on new stores scheduled to
open later this year and in 1998.
8 of 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
The Company is not involved in any material pending legal proceedings,
other than routine litigation in the ordinary course of business.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
(27.1) Financial Data Schedule is filed herein as an Exhibit.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
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 thereunto duly authorized.
NORDSTROM, INC.
(Registrant)
/s/ John A. Goesling
------------------------------------------
John A. Goesling, Executive Vice President
and Treasurer
(Principal Financial and Accounting Officer)
Date: June 6, 1997
- --------------------
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NORDSTROM, INC. AND SUBSIDIARIES
Exhibit Index
Exhibit Method of Filing
- ------- ----------------
27.1 Financial Data Schedule Filed herewith electronically
5
1,000
3-MOS
JAN-31-1998
APR-30-1997
49,066
0
661,284
0
823,609
1,602,571
1,184,278
0
2,804,859
919,639
371,469
0
0
184,607
1,217,324
2,804,859
953,747
953,747
646,512
900,398
0
0
7,510
53,349
21,000
0
0
0
0
32,349
.41
.41
