Double-Digit Growth in Digital Sales
Nordstrom, Inc. (NYSE: JWN) today reported earnings per diluted
share for the first quarter ended May 5, 2018 of $0.51,
compared with the first quarter ended April 29, 2017 of $0.37,
which included a debt refinancing charge of $0.06.
Total Company net sales increased 5.8 percent for the first
quarter ended May 5, 2018 compared with the quarter ended April 29,
2017. This reflected an increase of approximately 250 basis points
primarily due to the shift of a Nordstrom Rewards loyalty event
into the first quarter relative to the second quarter last year.
Comparable sales for the first quarter ended May 5, 2018 increased
0.6 percent, compared with the 13-week period ended May 6,
2017.
The Company continues to invest in new market opportunities and
digital capabilities to drive customer engagement and market share
gains. During the quarter, the Company made the following
achievements in executing its growth plans:
- The Company reached a significant
milestone in its history with the opening of the Nordstrom Men's
Store in New York City.
- The Company expanded its presence in
Canada with the introduction of Nordstrom Rack, opening three
stores in the Toronto and Calgary markets.
- In executing its digital strategy, the
Company increased sales enabled through digital capabilities by 18
percent in the first quarter, compared with the same period in
2017. Digitally enabled sales represented 29 percent of first
quarter sales, up from 25 percent a year ago.
- Sales from Nordstrom Rewards customers
represented 53 percent of first quarter sales, compared with 47
percent a year ago.
FIRST QUARTER SUMMARY
- First quarter net earnings were $87
million compared with $63 million during the same period in fiscal
2017. Results in 2017 included an interest expense charge of $18
million related to a debt refinancing.
- Earnings before interest and taxes
("EBIT") were $153 million, or 4.4 percent of net sales, compared
with $151 million, or 4.6 percent of net sales, during the same
period in fiscal 2017.
- In Full-price, which consists of
Nordstrom U.S. full-line stores, Nordstrom.com, the Canadian
operation, Trunk Club, Jeffrey and Nordstrom Local, comparable
sales increased 0.7 percent. The top-ranking merchandise categories
were Kids' Apparel and Men's Apparel.
- In Off-price, which consists of
Nordstrom U.S. Rack stores, Nordstromrack.com/HauteLook and Last
Chance clearance stores, comparable sales increased 0.4
percent.
- Gross profit, as a percentage of net
sales, of 34.1 percent decreased 21 basis points compared with the
same period in fiscal 2017. This reflected higher occupancy
expenses related to U.S. and Canada Rack openings in addition to
planned pre-opening expenses associated with the Nordstrom Men's
Store NYC.
- The Company ended the first quarter in
a good inventory position with net sales growth exceeding a decline
in inventory.
- Selling, general and administrative
expenses, as a percentage of net sales, of 32.3 percent increased
32 basis points compared with the same period in fiscal 2017,
primarily due to planned pre-opening expenses associated with the
Nordstrom Men's Store NYC. The Company's rate performance reflected
an improvement relative to recent historical trends driven by
productivity gains in technology, supply chain and marketing.
- During the quarter, the Company
repurchased 0.3 million shares of its common stock for $13 million.
A total capacity of $401 million remains available under its
existing share repurchase board authorization. The actual timing,
price, manner and amounts of future share repurchases, if any, will
be subject to market and economic conditions and applicable
Securities and Exchange Commission ("SEC") rules.
EXPANSION UPDATE
To date in fiscal 2018, the Company opened eight stores and
closed one store. The Company opened the following stores in the
first quarter of 2018:
Location Store Name
SquareFootage(000's)
Timing
Full-price U.S. -
Nordstrom full-line New York, New York
Nordstrom Men's Store NYC
47
April 12
Canada - Nordstrom Rack Toronto, Ontario
Vaughan Mills
38
March 22 Calgary, Alberta
Deerfoot Meadows
30
April 26 Toronto, Ontario
One Bloor
39
May 3
Off-price U.S. - Nordstrom Rack
Bridgewater, New Jersey
Chimney Rock Crossing
36
March 8 Lancaster County, Pennsylvania
Shoppes at Belmont
26
March 8 Shenandoah, Texas
Portofino Shopping Center
27
March 18 Santa Clarita, California
Promenade at Town Center
30
April 19 Number of stores
May 5, 2018
April 29, 2017 Full-price U.S. - Nordstrom full-line1
117 117 Canada - Nordstrom full-line
6 5 Canada -
Nordstrom Rack
3 — Other Full-price2
9 9
Off-price U.S. - Nordstrom Rack
236 220 Last Chance
clearance stores
2 2
Total 373 353 1
U.S. - Nordstrom full-line includes the Nordstrom Local store in
California. 2 Other Full-price includes Trunk Club clubhouses and
Jeffrey boutiques. Gross square footage
30,420,000
29,764,000
FISCAL YEAR 2018 OUTLOOK
The Company updated its annual outlook expectations for earnings
per diluted share to incorporate first quarter results. Nordstrom's
current expectations for fiscal 2018 are as follows:
Prior Outlook
Current Outlook Net sales $15.2 to $15.4 billion
No change Comparable sales (percent) 0.5 to
1.5 No change EBIT $885 to $940 million $895 to $940 million
Earnings per diluted share (excluding the impact of any future
share repurchases) $3.30 to $3.55 $3.35 to $3.55
The Company’s updated annual outlook expectations incorporated
the following assumptions:
- The shift in the Anniversary Sale event
into the second quarter relative to the second and third quarters
in 2017 and the adoption of the new revenue recognition guidance is
expected to impact total sales percentage by an increase of
approximately 150 basis points in the second quarter and a decrease
of approximately 150 basis points in the third quarter.
- Credit card revenues growth in the
mid-teens range.
CONFERENCE CALL INFORMATION
The Company's senior management will host a conference call to
discuss first quarter 2018 results and fiscal 2018 outlook at 4:45
p.m. Eastern Daylight Time today. To listen to the live call online
and view the conference call slides and the speakers' prepared
remarks, visit the Investor Relations section of the Company's
corporate website at http://investor.nordstrom.com. An archived
webcast with the speakers' prepared remarks and the conference call
slides will be available in the Quarterly Earnings section for at
least one year. Interested parties may also dial 201-689-8354. A
telephone replay will be available beginning approximately three
hours after the conclusion of the call by dialing 877-660-6853 or
201-612-7415 and entering Conference ID 13679678, until the close
of business on May 24, 2018.
ABOUT NORDSTROM
Nordstrom, Inc. is a leading fashion retailer based in the U.S.
Founded in 1901 as a shoe store in Seattle, today Nordstrom
operates 373 stores in 40 states, including 122 full-line stores in
the United States, Canada and Puerto Rico; 239 Nordstrom Rack
stores; two Jeffrey boutiques; two clearance stores; seven Trunk
Club clubhouses; and its Nordstrom Local service concept.
Additionally, customers are served online through Nordstrom.com,
Nordstromrack.com, HauteLook, and TrunkClub.com. Nordstrom, Inc.'s
common stock is publicly traded on the NYSE under the symbol
JWN.
Certain statements in this news release contain or may suggest
"forward-looking" information (as defined in the Private Securities
Litigation Reform Act of 1995) that involve risks and uncertainties
including, but not limited to, our anticipated financial outlook
for the fiscal year ending February 2, 2019, our anticipated
annual total and comparable sales rates, our anticipated new store
openings in existing, new and international markets, our
anticipated Return on Invested Capital and trends in our
operations. Such statements are based upon the current beliefs and
expectations of our management and are subject to significant risks
and uncertainties. Our actual future results may differ materially
from historical results or current expectations depending upon
factors including, but not limited to: successful execution of our
customer strategy to provide a differentiated and seamless
experience across all Nordstrom channels; timely and effective
implementation of our plans to evolve our business model, including
development of applications for electronic devices, improvement of
customer-facing technology, timely delivery of products purchased
digitally, enhancement of inventory management systems, greater and
more fluid inventory availability between our digital channels and
retail store locations, and greater consistency in marketing and
pricing strategies, as well as our ability to manage the costs
associated with this evolving business model; our ability to evolve
our business model as necessary to respond to the business and
retail environment, as well as fashion trends and consumer
preferences, including changing expectations of service and
experience in stores and online; our ability to properly balance
our investments in existing and new store locations, especially our
investments in our Nordstrom Men's Store NYC and Nordstrom NYC;
successful execution of our information technology strategy; our
ability to effectively utilize data in strategic planning and
decision making; timely completion of construction associated with
newly planned stores, relocations and remodels, all of which may be
impacted by the financial health of third parties and consumer
traffic to the locations; efficient and proper allocation of our
capital resources; effective inventory management processes and
systems, fulfillment and supply chain processes and systems,
disruptions in our supply chain and our ability to control costs;
the impact of any systems or network failures, cybersecurity and/or
security breaches, including any security breach of our systems or
those of a third party provider that results in the theft, transfer
or unauthorized disclosure of customer, employee or Company
information or compliance with information security and privacy
laws and regulations in the event of such an incident; our ability
to safeguard our reputation and maintain our vendor relationships;
our ability to maintain relationships with and motivate our
employees and to effectively attract, develop and retain our future
leaders; our ability to realize the expected benefits, respond to
potential risks and appropriately manage costs associated with our
program agreement with TD; the effectiveness of planned
advertising, marketing and promotional campaigns in the highly
competitive and promotional retail industry; market fluctuations,
increases in operating costs, exit costs and overall liabilities
and losses associated with owning and leasing real estate;
potential goodwill impairment charges, future impairment charges
and fluctuations in the fair values of reporting units or of assets
in the event projected financial results are not achieved within
expected time frames; compliance with debt covenants and operating
covenants, availability and cost of credit, changes in our credit
rating and changes in interest rates; the timing, price, manner and
amounts of future share repurchases by the Company, if any, or any
share issuances by the Company; the impact of the seasonal nature
of our business and cyclical customer spending; the impact of
economic and market conditions and the resultant impact on consumer
spending and credit patterns; the impact of economic, environmental
or political conditions in the U.S. and countries where our third
party vendors operate; weather conditions, natural disasters,
health hazards, national security or other market and supply chain
disruptions, or the prospects of these events and the resulting
impact on consumer spending patterns or information technology
systems and communications; our compliance with applicable domestic
and international laws, regulations and ethical standards,
including those related to employment and tax, and the outcome of
claims and litigation and resolution of such matters; the impact of
the current regulatory environment and financial system, health
care, and tax reforms; and the impact of changes in accounting
rules and regulations, changes in our interpretation of the rules
or regulations, or changes in underlying assumptions, estimates or
judgments. Our SEC reports, including our Form 10-K for the fiscal
year ended February 3, 2018, 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, except
as required by law.
NORDSTROM, INC.CONSOLIDATED STATEMENTS OF
EARNINGS(unaudited; amounts in millions, except per
share amounts)
Quarter Ended May 5, 2018
April 29, 2017 Net sales
$ 3,469 $
3,279 Credit card revenues, net
92 75 Total
revenues
3,561 3,354 Cost of sales and related buying and
occupancy costs
(2,288 ) (2,155 ) Selling, general
and administrative expenses
(1,120 ) (1,048 )
Earnings before interest and income taxes
153 151 Interest
expense, net
(28 ) (48 ) Earnings before income taxes
125 103 Income tax expense
(38 ) (40 )
Net
earnings $ 87 $ 63 Earnings
per share: Basic
$ 0.52 $ 0.38 Diluted
$
0.51 $ 0.37 Weighted-average shares outstanding:
Basic
167.8 167.3 Diluted
170.2 169.1 Percent
of net sales: Gross profit
34.1 % 34.3 % Selling,
general and administrative expenses
32.3 % 32.0 %
Earnings before interest and income taxes
4.4 % 4.6 %
NORDSTROM, INC.CONSOLIDATED BALANCE SHEETS(unaudited;
amounts in millions)
May 5, 2018 February
3, 2018 April 29, 2017 Assets Current
assets: Cash and cash equivalents
$ 966 $ 1,181 $ 653
Accounts receivable, net
186 145 209 Merchandise inventories
2,120 2,027 2,160 Prepaid expenses and other
291
150 147 Total current assets
3,563
3,503 3,169 Land, property and equipment (net of accumulated
depreciation of $6,227, $6,105 and $5,742)
3,887 3,939 3,872
Goodwill
249 238 238 Other assets
317 435
492
Total assets $ 8,016
$ 8,115 $ 7,771
Liabilities and
Shareholders' Equity Current liabilities: Accounts payable
$ 1,575 $ 1,409 $ 1,590 Accrued salaries, wages and
related benefits
317 578 319 Other current liabilities
1,307 1,246 1,225 Current portion of long-term debt
56 56 11 Total current liabilities
3,255 3,289 3,145 Long-term debt, net
2,680
2,681 2,731 Deferred property incentives, net
495 495 530
Other liabilities
516 673 688 Commitments and
contingencies Shareholders' equity: Common stock, no par
value: 1,000 shares authorized; 167.8, 167.0 and 166.0 shares
issued and outstanding
2,852 2,816 2,730 Accumulated deficit
(1,738 ) (1,810 ) (1,999 ) Accumulated other
comprehensive loss
(44 ) (29 ) (54 ) Total
shareholders' equity
1,070 977 677
Total liabilities and shareholders' equity $
8,016 $ 8,115 $ 7,771
NORDSTROM, INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(unaudited; amounts in millions)
Quarter Ended May 5, 2018
April 29, 2017 Operating Activities Net
earnings
$ 87 $ 63 Adjustments to reconcile net
earnings to net cash (used in) provided by operating activities:
Depreciation and amortization expenses
169 161 Amortization
of deferred property incentives and other, net
(18 )
(26 ) Deferred income taxes, net
(22 ) (21 )
Stock-based compensation expense
23 16 Change in operating
assets and liabilities: Accounts receivable
(42 ) (10
) Merchandise inventories
(30 ) (266 ) Prepaid
expenses and other assets
(173 ) (11 ) Accounts
payable
212 272 Accrued salaries, wages and related benefits
(259 ) (136 ) Other current liabilities
4 9
Deferred property incentives
24 32 Other liabilities
(3 ) 6 Net cash (used in) provided by
operating activities
(28 ) 89
Investing Activities Capital expenditures
(129
) (153 ) Other, net
(20 ) 9 Net cash
used in investing activities
(149 ) (144 )
Financing Activities Proceeds from long-term borrowings, net
of discounts
— 635 Principal payments on long-term
borrowings
(3 ) (653 ) Increase (decrease) in cash
book overdrafts
27 (21 ) Cash dividends paid
(62
) (62 ) Payments for repurchase of common stock
(13
) (211 ) Proceeds from issuances under stock compensation
plans
24 11 Tax withholding on share-based awards
(11
) (5 ) Other, net
— 7 Net cash used in
financing activities
(38 ) (299 ) Net decrease
in cash and cash equivalents
(215 ) (354 ) Cash and
cash equivalents at beginning of period
1,181 1,007
Cash and cash equivalents at end of period $
966 $ 653
NORDSTROM, INC.SUMMARY OF NET SALES(unaudited; amounts in
millions)
During the first quarter of 2018, we adopted the new revenue
recognition guidance using the modified retrospective adoption
method. Results beginning in the first quarter of 2018 are
presented under the new guidance, while prior period amounts are
not adjusted. Also beginning in 2018, we aligned our sales
presentation with how we view the results of our operations
internally and how our customers view us, by our Full-price and
Off-price businesses.
Our Full-price business includes our Nordstrom U.S. full-line
stores, Nordstrom.com, the Canadian operation, Trunk Club, Jeffrey
and Nordstrom Local. Our Off-price business includes Nordstrom U.S.
Rack stores, Nordstromrack.com/HauteLook and Last Chance clearance
stores. The following table summarizes net sales and comparable
sales within our business for the first quarter ended 2018 compared
with the same period in fiscal 2017:
Quarter Ended May 5,
20182
April 29, 2017 Net sales by
business1
: Full-price
$ 2,240 $ 2,156
Off-price
1,229 1,152 Other
— (29 )
Total
net sales $ 3,469 $ 3,279
Comparable sales increase (decrease) by business: Full-price
0.7 % (2.9 %) Off-price
0.4 % 2.3 %
Total Company 0.6 % (0.8 %) Digitally
enabled sales as % of total net sales3
29 % 25 %
1 We present our sales for 2018 and 2017 to align with how
management views our results internally, including presenting 2018
under the new revenue recognition guidance and allocating our sales
returns reserve to our Full-price and Off-price business. For 2017
and prior, Other primarily included unallocated sales return,
in-transit and loyalty related adjustments necessary to reconcile
sales by business to total net sales.
2 Total net sales in the first quarter of 2018 increased
approximately 250 basis points due to the shift of a Nordstrom
Rewards loyalty event into the first quarter relative to the second
quarter and the adoption of the new revenue recognition guidance.
Full-price and Off-price net sales increased approximately 200
basis points and 100 basis points for the same impacts as total
company, in addition to allocating sales return reserves to the
Full-price and Off-price businesses.
3 Digitally enabled sales are online sales and digitally
assisted store sales which include Buy Online, Pickup in Store
(“BOPUS”), Reserve Online, Try on in Store (Store Reserve) and
Style Board, a digital selling tool.
NORDSTROM, INC.RETURN ON INVESTED CAPITAL (NON-GAAP FINANCIAL
MEASURE)(unaudited; dollar amounts in millions)
We believe that ROIC is a useful financial measure for investors
in evaluating the efficiency and effectiveness of the capital we
have invested in our business to generate returns. ROIC adjusts our
operating leases as if they met the criteria for capital leases or
we had purchased the properties. This provides additional
supplemental information that reflects the investment in our
off-balance sheet operating leases, controls for differences in
capital structure between us and our competitors and provides
investors and credit agencies with another way to comparably
evaluate the efficiency and effectiveness of our capital
investments over time. In addition, we incorporate ROIC into our
executive incentive measures and it is an important component of
shareholders’ return over the long term.
We define ROIC as our adjusted net operating profit after tax
divided by our average invested capital using the trailing 12-month
average. ROIC is not a measure of financial performance under
generally accepted accounting principles (“GAAP”) and should be
considered in addition to, and not as a substitute for, return on
assets, net earnings, total assets or other financial measures
prepared in accordance with GAAP. Our method of determining
non-GAAP financial measures may differ from other companies’
methods and therefore may not be comparable to those used by other
companies. Estimated depreciation on capitalized operating leases
and average estimated asset base of capitalized operating leases
are not calculated in accordance with, or an alternative for, GAAP
and should not be considered in isolation or as a substitution of
our results as reported under GAAP. The financial measure
calculated under GAAP which is most directly comparable to ROIC is
return on assets.
For the 12 fiscal months ended May 5, 2018, our ROIC
increased to 9.9% compared with 8.7% for the 12 fiscal months ended
April 29, 2017. Results for the prior period were negatively
impacted by approximately 320 basis points due to the Trunk Club
non-cash goodwill impairment charge in the third quarter of
2016.
The following is a reconciliation of the components of ROIC and
return on assets:
12 Fiscal Months Ended May 5,
2018 April 29, 2017 Net earnings $
461 $ 371 Add: income tax expense1
351 341 Add:
interest expense
123 140 Earnings before
interest and income tax expense
935 852 Add: rent
expense, net
254 212 Less: estimated depreciation on
capitalized operating leases2
(135 ) (113 ) Adjusted
net operating profit
1,054 951 Less: estimated income
tax expense
(456 ) (436 )
Adjusted net operating
profit after tax $ 598 $ 515
Average total assets $ 8,067 $ 7,977 Less:
average non-interest-bearing current liabilities3
(3,306
) (3,013 ) Less: average deferred property incentives and
deferred rent liability3
(642 ) (644 ) Add: average
estimated asset base of capitalized operating leases2
1,893
1,570
Average invested capital $
6,012 $ 5,890
Return on assets4
5.7 % 4.7 %
ROIC4
9.9 % 8.7 %
1 Results for the 12 fiscal months ended May 5, 2018
include a $42 impact related to the Tax Act.
2 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
had purchased the property. The asset base is calculated based upon
the trailing 12-month average of the monthly asset base. The asset
base for each month is calculated as the trailing 12 months of 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.
3 Balances associated with our deferred rent liability have
been classified as long-term liabilities as of January 28,
2017.
4 Results for the 12 fiscal months ended April 29, 2017
include the $197 impact of the Trunk Club non-cash goodwill
impairment charge in the third quarter of 2016, which negatively
impacted the prior period return on assets by approximately 240
basis points and ROIC by approximately 320 basis points.
NORDSTROM, INC.ADJUSTED DEBT TO EBITDAR (NON-GAAP FINANCIAL
MEASURE)(unaudited; dollar amounts in millions)
Adjusted Debt to earnings before interest, income taxes,
depreciation, amortization and rent ("EBITDAR") is one of our key
financial metrics, and we believe that our debt levels are best
analyzed using this measure. Our goal is to manage debt levels to
maintain an investment-grade credit rating and operate with an
efficient capital structure. In evaluating our debt levels, this
measure provides a reflection of our credit worthiness that could
impact our credit rating and borrowing costs. We also have a debt
covenant that requires an adjusted debt to EBITDAR leverage ratio
of no more than four times. As of May 5, 2018, our Adjusted
Debt to EBITDAR was 2.6, and as of April 29, 2017, it was
2.3.
Adjusted Debt to EBITDAR is not a measure of financial
performance under GAAP and should be considered in addition to, and
not as a substitute for, debt to net earnings, net earnings, debt
or other financial measures prepared in accordance with GAAP. Our
method of determining non-GAAP financial measures may differ from
other companies' methods and therefore may not be comparable to
those used by other companies. The financial measure calculated
under GAAP which is most directly comparable to Adjusted Debt to
EBITDAR is debt to net earnings. The following is a reconciliation
of the components of Adjusted Debt to EBITDAR and debt to net
earnings:
20181
20171
Debt $ 2,736 $ 2,742 Add: estimated
capitalized operating lease liability2
2,029 1,700
Adjusted Debt $ 4,765 $ 4,442
Net earnings $ 461 $ 371 Add: income tax
expense
351 341 Add: interest expense, net
116
138 Earnings before interest and income taxes
928 850
Add: depreciation and amortization expenses
674 649 Add:
rent expense, net
254 212 Add: non-cash acquisition-related
charges3
1 207
Adjusted EBITDAR $
1,857 $ 1,918
Debt to Net Earnings4
5.9 7.4
Adjusted Debt to EBITDAR 2.6 2.3
1 The components of Adjusted Debt are as of May 5, 2018 and
April 29, 2017, while the components of Adjusted EBITDAR are
for the 12 months ended May 5, 2018 and April 29,
2017.
2 Based upon the estimated lease liability as of the end of the
period, calculated as the trailing 12 months of rent expense
multiplied by eight. The multiple of eight times rent expense 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.
3 Non-cash acquisition-related charges for the 12 months
ended April 29, 2017 included the goodwill
impairment charge of $197 related to Trunk Club.
4 Results for the period ended April 29, 2017 include the
$197 impact of the Trunk Club goodwill impairment charge, which
approximates 260 basis points.
NORDSTROM, INC.FREE CASH FLOW (NON-GAAP FINANCIAL
MEASURE)(unaudited; amounts in millions)
Free Cash Flow is one of our key liquidity measures, and when
used in conjunction with GAAP measures, provides investors with a
meaningful analysis of our ability to generate cash from our
business. For the quarter ended May 5, 2018, we had Free Cash Flow
of ($130) compared with ($85) for the first quarter ended 2017.
Beginning in the first quarter of fiscal 2018, we no longer
reduce free cash flow by cash dividends paid. We believe that no
longer reducing free cash flow by dividends paid is more reflective
of our operating performance and more consistent with the way we
manage our business, how our peers calculate free cash flows, and
prevailing industry practice. Prior period Free Cash Flow financial
measures have been recast to conform with current period
presentation.
Free Cash Flow is not a measure of financial performance under
GAAP and should be considered in addition to, and not as a
substitute for, operating cash flows or other financial measures
prepared in accordance with GAAP. Our method of determining
non-GAAP financial measures may differ from other companies'
methods and therefore may not be comparable to those used by other
companies. The financial measure calculated under GAAP which is
most directly comparable to Free Cash Flow is net cash provided by
operating activities. The following is a reconciliation of net cash
provided by operating activities to Free Cash Flow:
Quarter Ended May 5, 2018
April 29, 2017 Net cash (used in) provided by
operating activities $ (28 ) $ 89 Less:
capital expenditures
(129 ) (153 ) Add (Less): change
in cash book overdrafts
27 (21 )
Free Cash
Flow $ (130 ) $ (85 )
NORDSTROM, INC.ADJUSTED EBITDA (NON-GAAP FINANCIAL
MEASURE)(unaudited; amounts in millions)
Adjusted earnings before interest, income taxes, depreciation
and amortization (“EBITDA”) is our key financial metric to reflect
our view of cash flow from net earnings. Adjusted EBITDA excludes
significant items which are non-operating in nature in order to
evaluate our core operating performance against prior periods and
increase comparability with our peers. The financial measure
calculated under GAAP which is most directly comparable to Adjusted
EBITDA is net earnings. As of May 5, 2018 and April 29,
2017, Adjusted EBITDA was $301 and $293.
Adjusted EBITDA is not a measure of financial performance under
GAAP and should be considered in addition to, and not as a
substitute for net earnings, overall change in cash or liquidity of
the business as a whole. Our method of determining non-GAAP
financial measures may differ from other companies’ methods and
therefore may not be comparable to those used by other companies.
The following is a reconciliation of net earnings to Adjusted
EBITDA:
Quarter Ended May 5, 2018
April 29, 2017 Net earnings $ 87
$ 63 Add: income tax expense
38 40 Add: interest expense,
net
28 48 Earnings before interest and income
taxes
153 151 Add: depreciation and amortization
expenses
169 161 Less: amortization of deferred property
incentives
(21 ) (19 )
Adjusted EBITDA
$ 301 $ 293
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version on businesswire.com: https://www.businesswire.com/news/home/20180517006099/en/
Nordstrom, Inc.Investors:Trina Schurman,
206-303-6503orMedia:Gigi Ganatra Duff, 206-303-3030
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