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Nordstrom, Inc. (JWN) today reported net earnings of $149 million,
or $0.70 per diluted share, for the first quarter ended April 28, 2012.
This represented an increase of 2.9 percent compared with net earnings
of $145 million, or $0.65 per diluted share, for the same quarter last
year.
First quarter same-store sales increased 8.5 percent compared with the
same period in fiscal 2011. Net sales in the first quarter were $2.53
billion, an increase of 13.7 percent compared with net sales of $2.23
billion during the same period in fiscal 2011.
The Company affirms its outlook on full year earnings per share.
Additional guidance on several key line items, including anticipated
directional trends in the three remaining quarters, is provided below.
FIRST QUARTER SUMMARY
Nordstrom’s first quarter performance was consistent with the Company’s
expectations, reflecting continued strength in same-store sales across
multiple channels combined with planned significant investments in the
business to improve the customer shopping experience and to enhance its
platform for sustainable, profitable growth.
--
Nordstrom net sales, which include results from the full-line and
Direct businesses, increased $191 million, or 10.8 percent, compared
with the same period in fiscal 2011. Same-store sales increased 9.3
percent. Top-performing merchandise categories included Handbags,
Women’s Shoes and Men’s Shoes.
--
Full-line same-store sales increased 5.6 percent compared with the
same period in fiscal 2011. The South and Midwest regions were the
top-performing geographic areas relative to the first quarter of 2011.
--
The Direct channel continued to show strong sales growth with an
increase of 44.2 percent, significantly outpacing the overall Company
performance and reflective of the Company’s multiple initiatives under
way in e-commerce.
--
Nordstrom Rack net sales increased $91 million, or 19.6 percent,
compared with the same period in fiscal 2011, with same-store sales up
6.8 percent.
--
Gross profit, as a percentage of net sales, decreased 31 basis points
compared with last year’s first quarter. The decline was mostly
attributable to enhancements made to the Fashion Rewards program and a
reduction in shipping revenue as a result of launching free shipping
and free returns for online purchases in the third quarter of 2011.
--
Retail selling, general and administrative expenses increased $110
million, or 18.0 percent, compared with last year’s first quarter. The
increase was primarily due to various initiatives to improve the
customer experience across all channels and specifically to grow our
e-commerce business. The increase also reflected higher volume from
existing and new stores.
--
In the Credit segment, customer payment rates continued to improve,
resulting in favorable trends in delinquency and write-off rates.
Annualized net write-offs were 4.7 percent of average credit card
receivables during the quarter, down from 7.0 percent in the first
quarter of 2011. Delinquencies as a percentage of credit card
receivables at the end of the first quarter were 2.3 percent, down
from 3.3 percent at the end of the first quarter of 2011. As a result
of these improvements and our expectations for the credit portfolio
performance, the reserve for bad debt was reduced by $10 million.
--
Earnings before interest and taxes increased $8 million to $280
million from $272 million in last year’s first quarter due to
increased sales, partially offset by costs related to our initiatives
to drive continued growth in e-commerce.
--
Return on invested capital (ROIC) for the 12 months ended April 28,
2012, was 13.1 percent, compared with 13.6 percent achieved in the
prior 12-month period. The decline was largely a function of higher
average cash balances relative to the prior period. The Company
anticipates that ROIC for fiscal 2012 will exceed ROIC for fiscal
2011. A reconciliation of this non-GAAP financial measure to the
closest GAAP measure is included below.
EXPANSION UPDATE
Nordstrom opened the following stores in the first quarter of 2012:
Location Store Name Square Timing
Footage
(000’s)
-------------------------- ------------------------- ---------------------------------- --------
Nordstrom Full-line Stores
Salt Lake City, Utah City Creek Center 133 March 22
Nordstrom Rack
Orange, California Outlets at Orange 35 March 1
Seattle, Washington(1) Westlake Center 41 March 15
Boise, Idaho Boise Towne Plaza 37 April 12
Alpharetta, Georgia North Point MarketCenter 35 April 19
Farmington, Connecticut West Farm Shopping Center 36 April 26
-------------------------- ------------------------- ---------------------------------- --------
(1)Nordstrom relocated its Downtown Seattle Nordstrom Rack
store to the nearby Westlake Center.
FISCAL YEAR 2012 OUTLOOK
Nordstrom affirms its earnings per share outlook for fiscal year 2012.
In addition, the Company is providing its view of directional quarterly
trends of several key line items:
--
The Company affirms its fiscal 2012 expectations for same-store sales
to increase 4 to 6 percent. Due to Nordstrom’s Anniversary event
starting one week later in July, an additional week of the event
shifts into August, which is in our fiscal third quarter. As a result,
the Company expects a low-single-digit increase in same-store sales in
the second quarter and a high-single-digit increase in same-store
sales in the third quarter.
--
The Company affirms its expectations for gross profit, as a percentage
of net sales, to decrease 5 to 35 basis points for the fiscal year. In
the second quarter, gross profit, as a percentage of net sales, is
expected to decrease between 70 and 90 basis points compared with last
year, and in the second half of the fiscal year, to range between a
decrease of 10 basis points to an increase of 10 basis points compared
with last year.
--
The Company expects retail selling, general and administrative
expenses to increase $275 million to $340 million for the fiscal year.
This is an increase of $10 million from initial fiscal 2012 guidance
and reflects additional e-commerce initiatives under way. Largely as a
result of the timing of our investments in e-commerce, second quarter
retail selling, general and administrative expenses, as a percentage
of net sales, are expected to increase between 80 and 100 basis points
compared with last year, and in the second half of the fiscal year, to
decrease between 70 and 90 basis points compared with last year.
--
Credit selling, general and administrative expenses in fiscal 2012 are
expected to be within a range of flat to an increase of $10 million.
This is a decrease of $10 million from initial fiscal 2012 guidance
and is attributable to the reduction in the reserve for bad debt that
occurred in the first quarter of 2012.
The Company’s expectations for fiscal 2012 are as follows:
Same-store sales 4 to 6 percent increase
Credit card revenues $0 to $10 million increase
Gross profit (%) 5 to 35 basis point decrease
Retail selling, general and administrative expenses ($) $275 to $340 million increase
Credit selling, general and administrative expenses ($) $0 to $10 million increase
Interest expense, net $25 to $30 million increase
Effective tax rate 39.0 percent
Earnings per diluted share $3.30 to $3.45
Diluted shares outstanding 212.6 million
CONFERENCE CALL INFORMATION
The Company’s senior management will host a conference call to discuss
first quarter 2012 results at 4:45 p.m. Eastern Daylight Time today. To
listen to the live call online, visit the Investor Relations section of
the Company’s corporate website at http://investor.nordstrom.com.
An archived webcast will be available in the webcasts section for one
year. Interested parties may also dial 415-228-4850 (passcode: NORD). A
telephone replay will be available beginning approximately one hour
after the conclusion of the call by dialing 203-369-0788 (passcode:
6673) until the close of business on May 17, 2012.
ABOUT NORDSTROM
Nordstrom, Inc. is one of the nation’s leading fashion specialty
retailers. Founded in 1901 as a shoe store in Seattle, today Nordstrom
operates 231 stores in 31 states, including 117 full-line stores, 110
Nordstrom Racks, two Jeffrey boutiques, one treasure&bond store and one
clearance store. Nordstrom also serves customers through Nordstrom.com
and through its catalogs. Additionally, the Company operates in the
online private sale marketplace through its subsidiary HauteLook.
Nordstrom, Inc.’s common stock 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 involve risks and uncertainties, including, but not
limited to, anticipated financial outlook for the fiscal year ending
February 2, 2013 and its second quarter and second half, anticipated
annual same-store sales rate, anticipated Return on Invested Capital and
trends in our operations. Such statements are based upon the current
beliefs and expectations of the Company’s management and are subject to
significant risks and uncertainties. Actual future results may differ
materially from historical results or current expectations depending
upon factors including, but not limited to: the impact of economic and
market conditions and the resultant impact on consumer spending
patterns; our ability to respond to the business environment, fashion
trends and consumer preferences, including changing expectations of
service and experience in stores and online; effective inventory
management; successful execution of our growth strategy, including
possible expansion into new markets, technological investments and
acquisitions, including our ability to realize the anticipated benefits
from such acquisitions, and the timely completion of construction
associated with newly planned stores, relocations and remodels, which
may be impacted by the financial health of third parties; our ability to
maintain relationships with our employees and to effectively attract,
develop and retain our future leaders; successful execution of our
multi-channel strategy; our compliance with applicable banking and
related laws and regulations impacting our ability to extend credit to
our customers; impact of the current regulatory environment and
financial system and health care reforms; the impact of any systems
failures, cybersecurity and/or security breaches, including any security
breaches that result in the theft, transfer or unauthorized disclosure
of customer, employee or company information or our compliance with
information security and privacy laws and regulations in the event of
such an incident; our compliance with employment laws and regulations
and other laws and regulations applicable to us; availability and cost
of credit; our ability to safeguard our brand and reputation; successful
execution of our information technology strategy; our ability to
maintain our relationships with vendors; trends in personal bankruptcies
and bad debt write-offs; changes in interest rates; efficient and proper
allocation of our capital resources; weather conditions, natural
disasters, health hazards or other market disruptions, or the prospects
of these events and the impact on consumer spending patterns;
disruptions in our supply chain; the geographic locations of our stores;
the effectiveness of planned advertising, marketing and promotional
campaigns; our ability to control costs; and the timing and amounts of
share repurchases by the Company, if any, or any share issuances by the
Company, including issuances associated with option exercises or other
matters. Our SEC reports, including our Form 10-K for the fiscal year
ended January 28, 2012, 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.
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
------------------------------------------------------------------------
(unaudited; amounts in millions, except per share data)
Quarter Ended
--------------------------------
4/28/12 4/30/11
------- -------
Net sales $ 2,535 $ 2,229
Credit card revenues 94 94
------- -------
Total revenues 2,629 2,323
Cost of sales and related buying and occupancy costs (1,584 ) (1,385 )
Selling, general and administrative expenses:
Retail (721 ) (611 )
Credit (44 ) (55 )
------- -- ------- --
Earnings before interest and income taxes 280 272
Interest expense, net (40 ) (31 )
------- -- ------- --
Earnings before income taxes 240 241
Income tax expense (91 ) (96 )
------- -- ------- --
Net earnings $ 149 $ 145
== ======= == =======
Earnings per share:
Basic $ 0.72 $ 0.66
Diluted $ 0.70 $ 0.65
Weighted average shares outstanding:
Basic 207.3 219.0
Diluted 211.4 223.3
NORDSTROM, INC.
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------------------
(unaudited; amounts in millions)
4/28/12 1/28/12 4/30/11
------- ------- -------
Assets
Current assets:
Cash and cash equivalents $ 1,647 $ 1,877 $ 1,433
Accounts receivable, net 2,008 2,033 1,969
Merchandise inventories 1,372 1,148 1,149
Current deferred tax assets, net 215 220 222
Prepaid expenses and other 79 282 80
------- ------- -------
Total current assets 5,321 5,560 4,853
Land, buildings and equipment (net of accumulated 2,472 2,469 2,361
depreciation
of $3,865, $3,791 and $3,600)
Goodwill 175 175 200
Other assets 290 287 333
------- ------- -------
Total assets $ 8,258 $ 8,491 $ 7,747
= ======= = ======= = =======
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 1,176 $ 917 $ 1,035
Accrued salaries, wages and related benefits 232 388 232
Other current liabilities 793 764 715
Current portion of long-term debt 6 506 506
------- ------- -------
Total current liabilities 2,207 2,575 2,488
Long-term debt, net 3,137 3,141 2,276
Deferred property incentives, net 503 500 506
Other liabilities 328 319 343
Commitments and contingencies
Shareholders’ equity:
1,557 1,484 1,362
Common stock, no par value: 1,000 shares
authorized; 208.6,
207.6 and 219.8 shares
issued and outstanding
Retained earnings 570 517 800
Accumulated other comprehensive loss (44 ) (45 ) (28 )
------- - ------- - ------- -
Total shareholders’ equity 2,083 1,956 2,134
------- ------- -------
Total liabilities and shareholders’ equity $ 8,258 $ 8,491 $ 7,747
= ======= = ======= = =======
NORDSTROM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------------
(unaudited; amounts in millions)
Quarter Ended
-------------------------------
4/28/12 4/30/11
------- -------
Operating Activities
Net earnings $ 149 $ 145
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization expenses 101 86
Amortization of deferred property incentives and other, net (18 ) (14 )
Deferred income taxes, net - 1
Stock-based compensation expense 13 11
Tax benefit from stock-based compensation 13 7
Excess tax benefit from stock-based compensation (14 ) (8 )
Provision for bad debt expense 13 25
Change in operating assets and liabilities:
Accounts receivable (6 ) 4
Merchandise inventories (204 ) (143 )
Prepaid expenses and other assets 2 (2 )
Accounts payable 203 154
Accrued salaries, wages and related benefits (156 ) (147 )
Other current liabilities 33 52
Deferred property incentives 21 29
Other liabilities 9 9
------- -------
Net cash provided by operating activities 159 209
------- -------
Investing Activities
Capital expenditures (98 ) (116 )
Change in restricted cash 200 -
Change in credit card receivables originated at third parties 17 30
Other, net - (2 )
------- ------- --
Net cash provided by (used in) investing activities 119 (88 )
------- ------- --
Financing Activities
Principal payments on long-term borrowings (502 ) (1 )
Increase (decrease) in cash book overdrafts 48 (9 )
Cash dividends paid (56 ) (50 )
Payments for repurchase of common stock (57 ) (171 )
Proceeds from issuances under stock compensation plans 47 29
Excess tax benefit from stock-based compensation 14 8
Other, net (2 ) -
------- -- -------
Net cash used in financing activities (508 ) (194 )
------- -- ------- --
Net decrease in cash and cash equivalents (230 ) (73 )
Cash and cash equivalents at beginning of period 1,877 1,506
------- -------
Cash and cash equivalents at end of period $ 1,647 $ 1,433
== ======= == =======
NORDSTROM, INC.
STATEMENTS OF EARNINGS BY SEGMENT
------------------------------------------------------------------------------------------------
(unaudited; amounts in millions, except percentages)
Retail
Our Retail business includes our Nordstrom branded full-line
stores and website, our Nordstrom Rack stores, and our other
retail channels including HauteLook, our Jeffrey stores and our
treasure&bond store. It also includes unallocated corporate center
expenses. The following table summarizes the results of our Retail
business for the quarter ended April 28, 2012 compared with the
quarter ended April 30, 2011:
Quarter % of sales(1) Quarter % of sales(1)
Ended Ended
4/28/12 4/30/11
-------------- ------------ -------------- ------------
Net sales $ 2,535 100.0 % $ 2,229 100.0 %
Cost of sales and related buying and (1,561 ) (61.6 %) (1,371 ) (61.5 %)
occupancy costs
------ ---- ------ ------ ------ ---- ------ ------
Gross profit 974 38.4 % 858 38.5 %
Selling, general and administrative expenses (721 ) (28.4 %) (611 ) (27.4 %)
------ ---- ------ ------ ------ ---- ------ ------
Earnings before interest and income taxes 253 10.0 % 247 11.1 %
Interest expense, net (34 ) (1.3 %) (27 ) (1.2 %)
------ ---- ------ ------ ------ ---- ------ ------
Earnings before income taxes $ 219 8.7 % $ 220 9.9 %
==== ====== ====== ====== ==== ====== ====== ======
(1)Subtotals and totals may not foot due to rounding.
NORDSTROM, INC.
STATEMENTS OF EARNINGS BY SEGMENT
---------------------------------------------------------------------------------------------------------
(unaudited; amounts in millions, except percentages)
Credit
Our Credit business earns finance charges, interchange fees, late
fees and other revenue through operation of the Nordstrom
private
label and Nordstrom VISA credit cards. The following tables
summarize the results of our Credit business for the
quarter
ended April 28, 2012 compared with the quarter ended April 30,
2011:
Quarter Ended
-----------------------------------------------
4/28/12 4/30/11
------- -------
Credit card revenues $ 94 $ 94
Interest expense (6 ) (4 )
------- - ------- -------------------
Net credit card income 88 90
Cost of sales and related buying and occupancy costs - loyalty (23 ) (14 )
program
Selling, general and administrative expenses:
Operational and marketing expenses (31 ) (30 )
Bad debt provision (13 ) (25 )
------- - ------- -------------------
Earnings before income taxes $ 21 $ 21
===== ======= = =======
The following table illustrates the activity in our allowance for
credit losses for the quarters ended April 28, 2012 and April 30,
2011:
Quarter Ended
-----------------------------------------------
4/28/12 4/30/11
------- -------
Allowance at beginning of period $ 115 $ 145
Bad debt provision 13 25
Write-offs (30 ) (40 )
Recoveries 7 5
------- -------
Allowance at end of period $ 105 $ 135
===== ======= = =======
Annualized net write-offs as a percentage of average credit card 4.7 % 7.0 %
receivables
4/28/12 4/30/11
------- -------
30+ days delinquent as a percentage of ending credit card receivables 2.3 % 3.3 %
Allowance as a percentage of ending credit card receivables 5.2 % 6.7 %
NORDSTROM, INC.
RETURN ON INVESTED CAPITAL (NON-GAAP
FINANCIAL MEASURE)
--------------------------------------------------------------------------------------------------
(unaudited; amounts in millions)
We use various financial measures in our conference calls,
investor meetings and other forums which may be considered
non-GAAP financial measures within the meaning of Regulation G of
the Securities and Exchange Commission. The following disclosure
provides additional information regarding our Return on Invested
Capital (ROIC) for the 12 fiscal months ended April 28, 2012 and
April 30, 2011:
We believe that ROIC is a useful financial measure for investors
in evaluating our operating performance. When analyzed in
conjunction with our net earnings and total assets and compared
with return on assets (net earnings divided by average total
assets), it provides investors with a useful tool to evaluate our
ongoing operations and our management of assets from period to
period. ROIC is one of our key financial metrics, and we also
incorporate it into our executive incentive measures. We believe
that overall performance as measured by ROIC correlates directly
to shareholders’ return over the long term. For the 12 fiscal
months ended April 28, 2012, our ROIC decreased to 13.1% compared
with 13.6% for the 12 fiscal months ended April 30, 2011. ROIC is
not a measure of financial performance under GAAP, should not be
considered a substitute for return on assets, net earnings or
total assets as determined in accordance with GAAP, and may not be
comparable with similarly titled measures reported by other
companies. The closest measure calculated using GAAP amounts is
return on assets, which decreased to 8.5% from 8.8% for the 12
fiscal months ended April 28, 2012, compared with the 12 fiscal
months ended April 30, 2011. The following is a comparison of
return on assets to ROIC:
12 fiscal months ended
-------------------------------------
4/28/12 4/30/11
--------- ---------
Net earnings $ 687 $ 641
Add: income tax expense 431 403
Add: interest expense 141 129
--------- ---------
Earnings before interest and income tax expense 1,259 1,173
Add: rent expense 83 66
Less: estimated depreciation on capitalized operating leases(1) (44 ) (35 )
--------- - --------- -
Net operating profit 1,298 1,204
Estimated income tax expense(2) (500 ) (465 )
--------- - --------- -
Net operating profit after tax $ 798 $ 739
========= ========= = =========
Average total assets(3) $ 8,119 $ 7,322
Less: average non-interest-bearing current liabilities(4) (2,104 ) (1,845 )
Less: average deferred property incentives(3) (506 ) (494 )
Add: average estimated asset base of capitalized operating leases(5) 589 463
--------- ---------
Average invested capital $ 6,098 $ 5,446
========= ========= = =========
Return on assets 8.5 % 8.8 %
ROIC 13.1 % 13.6 %
(1)Capitalized operating leases is our best estimate of
the asset base we would record for our leases that are classified
as operating if they had met the criteria for a capital lease, or
we purchased the property. Asset base is calculated as described
in footnote 5 below.
(2)Based upon our effective tax rate multiplied by the
net operating profit for the 12 fiscal months ended April 28, 2012
and April 30, 2011.
(3)Based upon the trailing 12-month average, including
cash and cash equivalents.
(4)Based upon the trailing 12-month average for accounts
payable, accrued salaries, wages and related benefits, and other
current liabilities.
(5)Based upon the trailing 12-month average of the
monthly asset base, which is calculated as the trailing 12-months
rent expense multiplied by eight. The multiple of eight times rent
expense is a commonly used method of estimating the asset base we
would record for our capitalized operating leases described in
footnote 1.
NORDSTROM, INC.
ADJUSTED DEBT TO EBITDAR (NON-GAAP
FINANCIAL MEASURE)
--------------------------------------------------------------------
(unaudited; amounts in millions)
We use various financial measures in our conference calls, investor
meetings and other forums which may be considered non-GAAP financial
measures within the meaning of Regulation G of the Securities and
Exchange Commission. The following disclosure provides additional
information regarding our Adjusted Debt to EBITDAR as of April 28,
2012 and April 30, 2011:
Adjusted Debt to EBITDAR is one of our key financial metrics, and we
believe that our debt levels are best analyzed using this measure.
Our current goal is to manage debt levels to maintain an
investment-grade credit rating as well as operate with an efficient
capital structure for our size, growth plans and industry.
Investment-grade credit ratings are important to maintaining access
to a variety of short-term and long-term sources of funding, and we
rely on these funding sources to continue to grow our business. We
believe a higher ratio, among other factors, could result in rating
agency downgrades. In contrast, we believe a lower ratio would
result in a higher cost of capital and could negatively impact
shareholder returns. As of April 28, 2012 and April 30, 2011, our
Adjusted Debt to EBITDAR was 2.1.
Adjusted Debt to EBITDAR is not a measure of financial performance
under GAAP and should not be considered a substitute for debt to net
earnings, net earnings or debt as determined in accordance with
GAAP. In addition, Adjusted Debt to EBITDAR does have limitations:
--
Adjusted Debt is not exact, but rather our best estimate of the total
company debt we would hold if we had purchased the property and issued
debt associated with our operating leases;
--
EBITDAR does not reflect our cash expenditures, or future requirements
for capital expenditures or contractual commitments, including leases,
or the cash requirements necessary to service interest or principal
payments on our debt; and
--
Other companies in our industry may calculate Adjusted Debt to EBITDAR
differently than we do, limiting its usefulness as a comparative
measure.
To compensate for these limitations, we analyze Adjusted Debt to
EBITDAR in conjunction with other GAAP financial and performance
measures impacting liquidity, including operating cash flows,
capital spending and net earnings. The closest measure calculated
using GAAP amounts is debt to net earnings, which was 4.6 for the
first quarter of 2012 and 4.3 for the first quarter of 2011. The
following is a comparison of debt to net earnings and Adjusted
Debt to EBITDAR:
2012(1 ) 2011(1 )
------- - ------- -
Debt $ 3,143 $ 2,782
Add: rent expense x 8(2) 667 525
Less: fair value hedge adjustment included in long-term debt (69 ) (27 )
------- - ------- -
Adjusted Debt $ 3,741 $ 3,280
= ======= = =======
Net earnings 687 641
Add: income tax expense 431 403
Add: interest expense, net 139 127
------- -------
Earnings before interest and income taxes 1,257 1,171
Add: depreciation and amortization expenses 386 333
Add: rent expense 83 66
Add: non-cash acquisition-related charges 22 -
------- -------
EBITDAR $ 1,748 $ 1,570
= ======= = =======
Debt to Net Earnings 4.6 4.3
Adjusted Debt to EBITDAR 2.1 2.1
(1)The components of Adjusted Debt are as of April 28,
2012 and April 30, 2011, while the components of EBITDAR are for
the 12 months ended April 28, 2012 and April 30, 2011.
(2)The multiple of eight times rent expense used to
calculate Adjusted Debt is a commonly used method of estimating
the debt we would record for our leases that are classified as
operating if they had met the criteria for a capital lease, or we
had purchased the property.
NORDSTROM, INC.
FREE CASH FLOW (NON-GAAP FINANCIAL
MEASURE)
--------------------------------------------------------------------
(unaudited; amounts in millions)
We use various financial measures in our conference calls, investor
meetings and other forums which may be considered non-GAAP financial
measures within the meaning of Regulation G of the Securities and
Exchange Commission. The following disclosure provides additional
information regarding our Free Cash Flow for the quarters ended
April 28, 2012 and April 30, 2011:
Free Cash Flow is one of our key liquidity measures, and in
conjunction with GAAP measures, provides us with a meaningful
analysis of our cash flows. We believe that our ability to generate
cash is more appropriately analyzed using this measure. Free Cash
Flow is not a measure of liquidity under GAAP and should not be
considered a substitute for operating cash flows as determined in
accordance with GAAP. In addition, Free Cash Flow does have
limitations:
--
Free Cash Flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of our ability to
fund our cash needs; and
--
Other companies in our industry may calculate Free Cash Flow
differently than we do, limiting its usefulness as a comparative
measure.
To compensate for these limitations, we analyze Free Cash Flow in
conjunction with other GAAP financial and performance measures
impacting liquidity, including operating cash flows. The closest
GAAP measure calculated using GAAP amounts is net cash provided by
operating activities, which was $159 and $209 for the quarters
ended April 28, 2012 and April 30, 2011. The following is a
reconciliation of our net cash provided by operating activities
and Free Cash Flow:
Quarter Ended
-------------------------------
4/28/12 4/30/11
------- -------
Net cash provided by operating activities $ 159 $ 209
Less: capital expenditures (98 ) (116 )
Less: cash dividends paid (56 ) (50 )
Add: change in credit card receivables originated at third parties 17 30
Add (Less): change in cash book overdrafts 48 (9 )
------- ------- -
Free Cash Flow $ 70 $ 64
======= ======= = =======
Net cash provided by (used in) investing activities $ 119 $ (88 )
Net cash used in financing activities $ (508 ) $ (194 )
SOURCE: Nordstrom, Inc.
Nordstrom, Inc.
INVESTOR CONTACT: Rob Campbell, 206-233-6550
MEDIA CONTACT: Colin Johnson, 206-303-3036
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