- Revenue and earnings in line with fiscal 2023
outlook
- Sales in both banners improve sequentially, Nordstrom Rack
posts double-digit growth during quarter
- Company provides fiscal 2024 outlook
SEATTLE, March 5,
2024 /PRNewswire/ -- Nordstrom, Inc. (NYSE: JWN)
today reported fourth quarter net earnings of $134 million, or $0.82 per diluted share ("EPS"), for the 14-week
quarter ended February 3, 2024. Excluding a supply chain asset
impairment and related charge, the Company reported adjusted EPS of
$0.96.1
For the 53-week fiscal year ended February 3, 2024, net
earnings were $134 million and
diluted EPS was $0.82, with earnings
before interest and taxes ("EBIT") of $251
million, or 1.8 percent of sales. Excluding charges related
to the wind-down of Canadian operations reported in the first and
third quarters and a supply chain asset impairment charge in the
fourth quarter, adjusted EBIT was $567
million, or 4.0 percent of sales, and adjusted EPS was
$2.12 for fiscal
2023.1
For the fourth quarter, total Company net sales increased 2.2
percent versus the same period in fiscal 2022, inclusive of
approximately $190 million related to
the 53rd week, and gross merchandise value ("GMV") increased 2.0
percent. Nordstrom banner net sales decreased 3.0 percent and GMV
decreased 3.4 percent compared with the fourth quarter of 2022. Net
sales for Nordstrom Rack increased 14.6 percent.
"We delivered on our 2023 guidance and are confident in our
expectations for continued sales improvement and sustained
profitability in 2024," said Erik
Nordstrom, chief executive officer of Nordstrom, Inc. "We're
laser-focused on efforts we know will drive growth and
profitability across the business over the next few years,
including new Rack store openings, Nordstrom digital growth and
increasing comp store sales. We have a strong team dedicated to
building on our heritage of service, and we look forward to helping
our customers feel good and look their best in the year ahead."
In the fourth quarter, active, beauty and women's apparel had
the strongest growth versus 2022. For fiscal 2023, active and
beauty had the strongest growth versus 2022.
"In 2023, we continued to make progress against the priorities
we identified at the outset of the year to improve the customer
experience and drive better financial results. Across both banners,
we improved our merchandise assortment by effectively managing our
inventory levels and investing in the products and brands we know
our customers respond to," said Pete
Nordstrom, president of Nordstrom, Inc. "This year, we'll
build on that progress in merchandising and other green shoots
across our business as we focus our efforts on our refreshed 2024
priorities."
As previously announced on February 28, 2024, the board of
directors declared a quarterly cash dividend of $0.19 per share to be paid to shareholders of
record at the close of business on March 12, 2024, payable on
March 27, 2024.
FOURTH QUARTER 2023 SUMMARY
- Total Company net sales in the fourth quarter increased 2.2
percent, inclusive of 460 basis points related to the 53rd week,
compared with the same period in fiscal 2022. The wind-down of
Canadian operations had a negative impact on total Company fourth
quarter net sales of 250 basis points. GMV increased 2.0 percent in
the fourth quarter and decreased 6.1 percent in fiscal 2023 when
compared with the same periods in 2022. Full-year revenue for
fiscal 2023, including retail sales and credit card revenues,
decreased 5.4 percent.
- Nordstrom banner net sales in the fourth quarter decreased 3.0
percent, inclusive of 410 basis points related to the 53rd week,
compared with the same period in fiscal 2022, improving
sequentially from the third quarter. The wind-down of Canadian
operations had a negative impact on Nordstrom banner fourth quarter
net sales of 355 basis points. GMV decreased 3.4 percent in the
fourth quarter and decreased 8.5 percent in fiscal 2023 when
compared with the same periods in 2022.
- Nordstrom Rack banner net sales in the fourth quarter increased
14.6 percent, inclusive of 580 basis points related to the 53rd
week, compared with the same period in fiscal 2022, improving
sequentially from the third quarter.
- Digital sales in the fourth quarter decreased 1.7 percent
compared with the same period in fiscal 2022. Digital sales
represented 38 percent of total sales during the quarter and 36
percent of sales for the fiscal year.
- Gross profit, as a percentage of net sales, of 34.4 percent
increased 125 basis points compared with the same period in fiscal
2022 due to lower markdowns, lower buying and occupancy costs and
leverage on higher sales.
- Ending inventory decreased 2.7 percent compared with the same
period in fiscal 2022, versus a 2.2 percent increase in sales.
- Selling, general and administrative ("SG&A") expenses, as a
percentage of net sales, of 32.4 percent increased 85 basis points
compared with the same period in fiscal 2022, primarily due to
higher labor costs and a supply chain asset impairment charge,
partially offset by improvements in variable costs from supply
chain efficiencies and leverage on higher sales. Excluding the
$32 million supply chain asset
impairment and related charge, adjusted SG&A expenses, as a
percentage of net sales, were 31.6 percent.
- EBIT was $215 million in the
fourth quarter of 2023, compared with $187
million during the same period in fiscal 2022. Adjusted EBIT
of $247 million for the fourth
quarter of 2023 excluded a supply chain asset impairment charge.
EBIT was $251 million for fiscal
2023, and adjusted EBIT of $567
million excluded charges related to the wind-down of
Canadian operations reported in the first and third quarters and a
supply chain asset impairment charge in the fourth quarter. EBIT
margin and adjusted EBIT margin for the quarter were 5.0 percent
and 5.7 percent of sales, respectively. EBIT margin and adjusted
EBIT margin for the fiscal year were 1.8 percent and 4.0 percent,
respectively.2
- Interest expense, net, of $26
million decreased from $27
million during the same period in fiscal 2022.
- Income tax expense during the fourth quarter was $55 million, or 29.1 percent of pretax earnings,
compared with $41 million, or 25.2
percent of pretax earnings, in the same period of fiscal 2022. The
increase was primarily due to unfavorable provision-to-return
adjustments recorded in the fourth quarter of 2023, compared with
the same quarter in fiscal 2022. The full-year income tax rate was
8.6 percent. Excluding a 1,640 basis point combined favorable
impact from the one-time Canada
charges and the supply chain asset impairment charge, the full-year
income tax rate would be 25.0 percent.
- The Company ended the year with $1.4
billion in available liquidity, including $628 million in cash.
STORES UPDATE
During fiscal 2023, the Company opened or relocated 20
stores:
City
|
|
Location
|
|
Square
Footage
(000s)
|
|
Timing of
Opening
|
Nordstrom
Rack
|
|
|
|
|
|
|
Los Angeles,
CA
|
|
NOHO West
|
|
26
|
|
April 13,
2023
|
Clovis, CA
|
|
Clovis
Crossing
|
|
31
|
|
April 13,
2023
|
Delray Beach,
FL
|
|
Delray Place
|
|
26
|
|
May 11, 2023
|
Chattanooga,
TN
|
|
The Terrace at Hamilton
Place
|
|
24
|
|
May 18, 2023
|
Las Vegas,
NV
|
|
Best in the
West
|
|
31
|
|
May 18, 2023
|
Birmingham,
AL
|
|
The Summit (relocation
from River Ridge)
|
|
27
|
|
May 25, 2023
|
Wichita, KS
|
|
Bradley Fair
|
|
28
|
|
May 25, 2023
|
San Clemente,
CA
|
|
San Clemente
Plaza
|
|
32
|
|
May 25, 2023
|
Aurora, CO
|
|
Southlands
|
|
29
|
|
August 17,
2023
|
Olympia, WA
|
|
Cooper Point
Marketplace
|
|
32
|
|
September 7,
2023
|
San Antonio,
TX
|
|
Northwoods
|
|
35
|
|
September 7,
2023
|
Union Gap,
WA
|
|
Valley Mall
|
|
28
|
|
September 14,
2023
|
Salem, OR
|
|
Willamette Town
Center
|
|
25
|
|
September 21,
2023
|
Visalia, CA
|
|
Sequoia Mall
|
|
29
|
|
October 5,
2023
|
Denton, TX
|
|
Denton
Crossing
|
|
25
|
|
October 5,
2023
|
Overland Park,
KS
|
|
Overland
Crossing
|
|
27
|
|
October 12,
2023
|
Allen, TX
|
|
The Village at
Allen
|
|
29
|
|
October 19,
2023
|
San Luis Obispo,
CA
|
|
SLO
Promenade
|
|
24
|
|
October 26,
2023
|
Sacramento,
CA
|
|
The Promenade at
Sacramento Gateway
|
|
26
|
|
October 26,
2023
|
Anaheim Hills,
CA
|
|
Anaheim Hills
Festival
|
|
24
|
|
November 9,
2023
|
The Company has also announced plans to open the following
stores:
City
|
|
Location
|
|
Square
Footage
(000s)
|
|
Timing of
Opening
|
Nordstrom
Rack
|
|
|
|
|
|
|
Pinole, CA
|
|
Pinole Vista
Crossing
|
|
23
|
|
Spring 2024
|
Kennesaw,
GA
|
|
Barrett
Place
|
|
25
|
|
Spring 2024
|
Elk Grove,
CA
|
|
The Ridge Elk
Grove
|
|
25
|
|
Spring 2024
|
Gilroy, CA
|
|
Gilroy
Crossing
|
|
25
|
|
Spring 2024
|
Oceanside,
CA
|
|
Pacific Coast
Plaza
|
|
31
|
|
Spring 2024
|
Wheaton, IL
|
|
Danada Square
East
|
|
29
|
|
Spring 2024
|
Snellville,
GA
|
|
Presidential
Markets
|
|
35
|
|
Spring 2024
|
Macedonia,
OH
|
|
Macedonia
Gateway
|
|
28
|
|
Spring 2024
|
Jacksonville Beach,
FL
|
|
South Beach
Regional
|
|
30
|
|
Spring 2024
|
Queen Creek,
AZ
|
|
Queen Creek
Marketplace
|
|
28
|
|
Spring 2024
|
Bay Shore,
NY
|
|
Gardiner Manor
Mall
|
|
24
|
|
Spring 2024
|
San Mateo,
CA
|
|
Bridgepointe Shopping
Center
|
|
36
|
|
Fall 2024
|
San Diego,
CA
|
|
Clairemont Town
Square
|
|
26
|
|
Fall 2024
|
Mason, OH
|
|
Deerfield Towne
Center
|
|
30
|
|
Fall 2024
|
San Antonio,
TX
|
|
Bandera
Pointe
|
|
25
|
|
Fall 2024
|
Mooresville,
NC
|
|
Mooresville
Crossing
|
|
28
|
|
Fall 2024
|
Franklin,
TN
|
|
Cool Springs
Market
|
|
24
|
|
Fall 2024
|
Noblesville,
IN
|
|
Hamilton Town
Center
|
|
25
|
|
Fall 2024
|
Omaha, NE
|
|
Village
Pointe
|
|
30
|
|
Fall 2024
|
Houston, TX
|
|
Meyerland
Plaza
|
|
34
|
|
Fall 2024
|
Fort Myers,
FL
|
|
Bell Tower
|
|
31
|
|
Fall 2024
|
Raleigh, NC
|
|
Triangle Town
Place
|
|
32
|
|
Fall 2024
|
Davis, CA
|
|
The Davis
Collection
|
|
25
|
|
Spring 2025
|
Matthews,
NC
|
|
Sycamore
Commons
|
|
25
|
|
Spring 2025
|
Geneva, IL
|
|
Randall
Square
|
|
25
|
|
Spring 2025
|
Manalapan Township,
NJ
|
|
Manalapan
Commons
|
|
26
|
|
Spring 2025
|
The Company had the following store counts as of
quarter-end:
|
February 3,
2024
|
|
January 28,
2023
|
Nordstrom
|
|
|
|
Nordstrom
– U.S.
|
93
|
|
94
|
Nordstrom
– Canada
|
—
|
|
6
|
Nordstrom Local
service hubs
|
6
|
|
7
|
ASOS |
Nordstrom
|
—
|
|
1
|
Nordstrom
Rack
|
|
|
|
Nordstrom Rack
– U.S.
|
258
|
|
241
|
Nordstrom Rack
– Canada
|
—
|
|
7
|
Last Chance clearance
stores
|
2
|
|
2
|
Total
|
359
|
|
358
|
|
Gross store square
footage
|
26,259,000
|
|
27,571,000
|
During the fourth quarter, the Company closed one ASOS |
Nordstrom store and one Nordstrom Rack store.
FISCAL YEAR 2024 OUTLOOK
The Company expects fiscal 2024 to be a year of continued
momentum in its growth and profitability drivers, including opening
new Rack stores, growing Nordstrom banner digital sales and driving
comparable store sales across both banners. As such, the Company is
providing the following financial outlook for fiscal 2024:
- Revenue range, including retail sales and credit card revenues,
of 2.0 percent decline to 1.0 percent growth versus the 53-week
fiscal 2023, which includes an approximately 135 basis point
unfavorable impact from the 53rd week
- Comparable sales range of 1.0 percent decline to 2.0 percent
growth versus 52 weeks in fiscal 20233
- EBIT margin of 3.5 to 4.0 percent of sales
- Income tax rate of approximately 27 percent
- EPS of $1.65 to $2.05, excluding the impact of share repurchase
activity, if any
The 53rd week in fiscal 2023 creates a timing shift in the 4-5-4
calendar for fiscal 2024 that is expected to impact comparisons to
the prior year.
CONFERENCE CALL INFORMATION
The Company's senior management will host a conference call to
provide a business update and to discuss fourth quarter 2023
financial results and fiscal year 2024 outlook at 4:45 p.m. EST today. To listen to the live call
online and view the speakers' prepared remarks and the conference
call slides, visit the Investor Relations section of the Company's
corporate website at investor.nordstrom.com. An archived webcast
with the speakers' prepared remarks and the conference call slides
will be available in the Quarterly Results section for 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 13744568, until the close of business on
March 12, 2024.
ABOUT NORDSTROM
At Nordstrom, Inc. (NYSE: JWN), we exist to help our customers
feel good and look their best. Since starting as a shoe store in
1901, how to best serve customers has been at the center of every
decision we make. This heritage of service is the foundation we're
building on as we provide convenience and true connection for our
customers. Our interconnected model enables us to serve customers
when, where and how they want to shop – whether that's in-store at
more than 350 Nordstrom, Nordstrom Local and Nordstrom Rack
locations or digitally through our Nordstrom and Rack apps and
websites. Through it all, we remain committed to leaving the world
better than we found it.
Certain statements in this press release contain or may
suggest "forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involves risks and
uncertainties that could cause results to be materially different
from expectations. The words "will," "may," "designed to,"
"outlook," "believes," "should," "targets," "anticipates,"
"assumptions," "plans," "expects" or "expectations," "intends,"
"estimates," "forecasts," "guidance" and similar expressions
identify certain of these forward-looking statements. The Company
also may provide forward-looking statements in oral statements or
other written materials released to the public. All statements
contained or incorporated in this press release or in any other
public statements that address such future events or expectations
are forward-looking statements. Important factors that could cause
actual results to differ materially from these forward-looking
statements are detailed in the Company's Annual Report on Form 10-K
for the fiscal year ended January 28,
2023, its Form 10-Qs for the fiscal quarters ended
April 29, 2023, July 29, 2023 and October
28, 2023, and our Form 10-K for the fiscal year ended
February 3, 2024, to be filed with
the SEC on or about March 15, 2024.
In addition, forward-looking statements contained in this release
may be impacted by the actual outcome of events or occurrences
related to the wind-down of business operations in Canada. These forward-looking statements are
not guarantees of future performance and speak only as of the date
made, and, except as required by law, the Company undertakes no
obligation to update or revise any forward-looking statements to
reflect subsequent events, new information or future circumstances.
In addition, the actual timing, price, manner and amounts of future
share repurchases, if any, will be subject to the discretion of our
board of directors, contractual commitments, market and economic
conditions and applicable Securities and Exchange Commission
rules.
1
|
Adjusted EBIT and
adjusted EPS are non-GAAP financial measures. Refer to the
"Adjusted EBIT, Adjusted EBITDA, Adjusted EBIT Margin and Adjusted
EPS" section of this release for additional information as well as
reconciliations between the Company's GAAP and non-GAAP financial
results.
|
2
|
Adjusted EBIT and
adjusted EBIT margin are non-GAAP financial measures. Refer to the
"Adjusted EBIT, Adjusted EBITDA, Adjusted EBIT Margin and Adjusted
EPS" section of this release for additional information as well as
reconciliations between the Company's GAAP and non-GAAP financial
results.
|
3
|
Comparable sales are
calculated as GMV, excluding the impact of estimated adjustments
for future customer returns and breakage from gift cards and Nordy
Club points and Notes, for our digital platform and stores that
have been open for over 13 full months and not closed during the
period. The 53rd week is not included in comparable sales
calculations.
|
NORDSTROM,
INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited; amounts in
millions, except per share amounts)
|
|
|
Quarter
Ended
|
|
Year
Ended
|
|
February 3,
2024
|
January 28,
2023
|
|
February 3,
2024
|
January 28,
2023
|
Net sales
|
$4,293
|
$4,200
|
|
$14,219
|
$15,092
|
Credit card revenues,
net
|
127
|
119
|
|
474
|
438
|
Total
revenues
|
4,420
|
4,319
|
|
14,693
|
15,530
|
Cost of sales and
related buying and occupancy costs
|
(2,815)
|
(2,807)
|
|
(9,303)
|
(10,019)
|
Selling, general and
administrative expenses
|
(1,390)
|
(1,325)
|
|
(4,855)
|
(5,046)
|
Canada wind-down
costs
|
—
|
—
|
|
(284)
|
—
|
Earnings before
interest and income taxes
|
215
|
187
|
|
251
|
465
|
Interest expense,
net
|
(26)
|
(27)
|
|
(104)
|
(128)
|
Earnings before income
taxes
|
189
|
160
|
|
147
|
337
|
Income tax
expense
|
(55)
|
(41)
|
|
(13)
|
(92)
|
Net
earnings
|
$134
|
$119
|
|
$134
|
$245
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
Basic
|
$0.83
|
$0.75
|
|
$0.83
|
$1.53
|
Diluted
|
$0.82
|
$0.74
|
|
$0.82
|
$1.51
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
Basic
|
162.5
|
160.1
|
|
161.8
|
160.1
|
Diluted
|
164.6
|
161.6
|
|
163.4
|
162.1
|
|
|
|
|
|
|
Percent of net
sales:
|
|
|
|
|
|
Gross
profit
|
34.4 %
|
33.2 %
|
|
34.6 %
|
33.6 %
|
Selling, general and
administrative expenses
|
32.4 %
|
31.5 %
|
|
34.2 %
|
33.4 %
|
Earnings before
interest and income taxes
|
5.0 %
|
4.5 %
|
|
1.8 %
|
3.1 %
|
NORDSTROM,
INC.
CONSOLIDATED BALANCE
SHEETS
(unaudited; amounts in
millions)
|
|
|
February 3,
2024
|
January 28,
2023
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$628
|
$687
|
Accounts receivable,
net
|
334
|
265
|
Merchandise
inventories
|
1,888
|
1,941
|
Prepaid expenses and
other current assets
|
286
|
316
|
Total current
assets
|
3,136
|
3,209
|
|
|
|
Land, property and
equipment (net of accumulated depreciation of $8,251 and
$8,289)
|
3,177
|
3,351
|
Operating lease
right-of-use assets
|
1,359
|
1,470
|
Goodwill
|
249
|
249
|
Other assets
|
523
|
466
|
Total
assets
|
$8,444
|
$8,745
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$1,236
|
$1,238
|
Accrued salaries,
wages and related benefits
|
244
|
291
|
Current portion of
operating lease liabilities
|
240
|
258
|
Other current
liabilities
|
1,102
|
1,203
|
Current portion of
long-term debt
|
250
|
—
|
Total current
liabilities
|
3,072
|
2,990
|
|
|
|
Long-term debt,
net
|
2,612
|
2,856
|
Non-current operating
lease liabilities
|
1,377
|
1,526
|
Other
liabilities
|
535
|
634
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
Common stock, no par
value: 1,000 shares authorized; 162.4 and 160.1 shares
issued
and
outstanding
|
3,418
|
3,353
|
Accumulated
deficit
|
(2,578)
|
(2,588)
|
Accumulated other
comprehensive gain (loss)
|
8
|
(26)
|
Total shareholders'
equity
|
848
|
739
|
Total liabilities
and shareholders' equity
|
$8,444
|
$8,745
|
NORDSTROM,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited; amounts in
millions)
|
|
|
Year
Ended
|
|
February 3,
2024
|
January 28,
2023
|
Operating
Activities
|
|
|
Net earnings
|
$134
|
$245
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization expenses
|
586
|
604
|
Canada wind-down
costs
|
207
|
—
|
Asset
impairment
|
30
|
80
|
Right-of-use asset
amortization
|
184
|
185
|
Deferred income taxes,
net
|
(60)
|
(83)
|
Stock-based
compensation expense
|
52
|
59
|
Other, net
|
(71)
|
(46)
|
Change in operating
assets and liabilities:
|
|
|
Merchandise
inventories
|
(61)
|
265
|
Other current and
noncurrent assets
|
(39)
|
(1)
|
Accounts
payable
|
40
|
(190)
|
Accrued salaries,
wages and related benefits
|
(42)
|
(94)
|
Lease
liabilities
|
(272)
|
(269)
|
Other current and
noncurrent liabilities
|
(67)
|
191
|
Net cash provided by
operating activities
|
621
|
946
|
|
|
|
Investing
Activities
|
|
|
Capital
expenditures
|
(569)
|
(473)
|
Decrease in cash and
cash equivalents resulting from Canada deconsolidation
|
(33)
|
—
|
Proceeds from the sale
of assets and other, net
|
31
|
80
|
Net cash used in
investing activities
|
(571)
|
(393)
|
|
|
|
Financing
Activities
|
|
|
Proceeds from
revolving line of credit
|
—
|
100
|
Payments on revolving
line of credit
|
—
|
(100)
|
Change in cash book
overdrafts
|
2
|
(14)
|
Cash dividends
paid
|
(123)
|
(119)
|
Payments for
repurchase of common stock
|
(1)
|
(62)
|
Proceeds from
issuances under stock compensation plans
|
20
|
29
|
Other, net
|
(7)
|
(20)
|
Net cash used in
financing activities
|
(109)
|
(186)
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
—
|
(2)
|
Net (decrease) increase
in cash and cash equivalents
|
(59)
|
365
|
Cash and cash
equivalents at beginning of year
|
687
|
322
|
Cash and cash
equivalents at end of year
|
$628
|
$687
|
NORDSTROM, INC.
ADJUSTED EBIT,
ADJUSTED EBITDA, ADJUSTED EBIT MARGIN
AND ADJUSTED EPS
(NON-GAAP FINANCIAL MEASURES)
(unaudited; amounts in
millions, except per share amounts)
The following are key financial metrics and, when used in
conjunction with GAAP measures, we believe they provide useful
information for evaluating our core business performance, enable
comparison of financial results across periods and allow for
greater transparency with respect to key metrics used by management
for financial and operational decision-making. Adjusted EBIT,
adjusted EBITDA, adjusted EBIT margin and adjusted EPS exclude
certain items that we do not consider representative of our core
operating performance. The financial measure calculated under GAAP
which is most directly comparable to adjusted EBIT and adjusted
EBITDA is net earnings. The financial measure calculated under GAAP
which is most directly comparable to adjusted EBIT margin is net
earnings as a percent of net sales. The financial measure
calculated under GAAP which is most directly comparable to adjusted
EPS is diluted EPS.
Adjusted EBIT, adjusted EBITDA, adjusted EBIT margin and
adjusted EPS are not measures of financial performance under GAAP
and should be considered in addition to, and not as a substitute
for, net earnings, net earnings as a percent of net sales,
operating cash flows, earnings per share, earnings per diluted
share or other financial measures performed in accordance with
GAAP. Our method of determining non-GAAP financial measures may
differ from other companies' financial measures and therefore may
not be comparable to methods used by other companies.
The following is a reconciliation of net earnings to adjusted
EBIT and adjusted EBITDA and net earnings as a percent of net sales
to adjusted EBIT margin:
|
Quarter
Ended
|
|
Year
Ended
|
|
February 3,
2024
|
January 28,
2023
|
|
February 3,
2024
|
January 28,
2023
|
Net
earnings
|
$134
|
$119
|
|
$134
|
$245
|
Income tax
expense
|
55
|
41
|
|
13
|
92
|
Interest expense,
net
|
26
|
27
|
|
104
|
128
|
Earnings before
interest and income taxes
|
215
|
187
|
|
251
|
465
|
Supply chain asset
impairment and related charges
|
32
|
—
|
|
32
|
70
|
Canada wind-down
costs
|
—
|
—
|
|
284
|
—
|
Trunk Club wind-down
costs
|
—
|
—
|
|
—
|
18
|
Gain on sale of
interest in a corporate office building
|
—
|
—
|
|
—
|
(51)
|
Adjusted
EBIT
|
247
|
187
|
|
567
|
502
|
Depreciation and
amortization expenses
|
156
|
151
|
|
586
|
604
|
Amortization of
developer reimbursements
|
(17)
|
(17)
|
|
(69)
|
(72)
|
Adjusted
EBITDA
|
$386
|
$321
|
|
$1,084
|
$1,034
|
|
|
|
|
|
|
Net
sales
|
$4,293
|
$4,200
|
|
$14,219
|
$15,092
|
Net earnings as a %
of net sales
|
3.1 %
|
2.8 %
|
|
0.9 %
|
1.6 %
|
EBIT margin
%
|
5.0 %
|
4.5 %
|
|
1.8 %
|
3.1 %
|
Adjusted EBIT margin
%
|
5.7 %
|
4.5 %
|
|
4.0 %
|
3.3 %
|
The following is a reconciliation of diluted EPS to adjusted
EPS:
|
Quarter
Ended
|
|
Year
Ended
|
|
February 3,
2024
|
January 28,
2023
|
|
February 3,
2024
|
January 28,
2023
|
Diluted
EPS
|
$0.82
|
$0.74
|
|
$0.82
|
$1.51
|
Supply chain asset
impairment and related charges
|
0.19
|
—
|
|
0.19
|
0.44
|
Canada wind-down
costs
|
—
|
—
|
|
1.74
|
—
|
Trunk Club wind-down
costs
|
—
|
—
|
|
—
|
0.11
|
Gain on sale of
interest in a corporate office building
|
—
|
—
|
|
—
|
(0.31)
|
Income tax impact on
adjustments1
|
(0.05)
|
—
|
|
(0.63)
|
(0.06)
|
Adjusted
EPS
|
$0.96
|
$0.74
|
|
$2.12
|
$1.69
|
|
|
1
|
The income tax impact
of non-GAAP adjustments is calculated using the estimated tax rate
for the respective non-GAAP adjustment.
|
NORDSTROM, INC.
SUMMARY OF NET
SALES
(unaudited; amounts in millions)
Our Nordstrom brand includes Nordstrom.com, Nordstrom U.S.
stores and Nordstrom Local. Nordstrom also included Canada operations prior to March 2, 2023, inclusive of Nordstrom.ca,
Nordstrom Canadian stores and Nordstrom Rack Canadian stores, ASOS
| Nordstrom prior to December 2023
and TrunkClub.com prior to October
2022. Our Nordstrom Rack brand includes NordstromRack.com,
Nordstrom Rack U.S. stores and Last Chance clearance stores. The
following table summarizes net sales for the quarter and year ended
February 3, 2024, compared with the
quarter and year ended January 28,
2023:
|
Quarter
Ended
|
|
Year
Ended
|
|
February 3,
2024
|
January 28,
2023
|
|
February 3,
2024
|
January 28,
2023
|
Net
sales:
|
|
|
|
|
|
Nordstrom
|
$2,866
|
$2,955
|
|
$9,436
|
$10,279
|
Nordstrom
Rack
|
1,427
|
1,245
|
|
4,783
|
4,813
|
Total net
sales
|
$4,293
|
$4,200
|
|
$14,219
|
$15,092
|
|
|
|
|
|
|
Net sales (decrease)
increase:
|
|
|
|
|
|
Nordstrom
|
(3.0 %)
|
(2.4 %)
|
|
(8.2 %)
|
6.6 %
|
Nordstrom
Rack
|
14.6 %
|
(8.1 %)
|
|
(0.6 %)
|
1.1 %
|
Total
Company
|
2.2 %
|
(4.1 %)
|
|
(5.8 %)
|
4.8 %
|
|
|
|
|
|
|
Digital sales as %
of total net sales1
|
38 %
|
40 %
|
|
36 %
|
38 %
|
|
|
1
|
Sales conducted through
a digital platform such as our websites or mobile apps. Digital
sales may be self-guided by the customer, as in a traditional
online order, or facilitated by a salesperson using a virtual
styling or selling tool. Digital sales may be delivered to the
customer or picked up in our Nordstrom stores, Nordstrom Rack
stores or Nordstrom Local service hubs. Digital sales also includes
a reserve for estimated returns.
|
NORDSTROM, INC.
ADJUSTED RETURN ON
INVESTED CAPITAL ("ADJUSTED ROIC")
(NON-GAAP FINANCIAL
MEASURE)
(unaudited; amounts in millions)
We believe that Adjusted 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 over
time. In addition, we have incorporated it in our executive
incentive measures and we believe it is an important indicator of
shareholders' return over the long term.
Beginning in the second quarter of 2023, the Adjusted ROIC
calculation was updated to exclude certain items that we do not
consider representative of our core operating performance. Refer to
non-operating related adjustments included within adjusted net
operating profit after tax and adjusted average invested capital.
Prior periods have been modified to conform with current period
presentation.
Adjusted ROIC is not a measure of financial performance under
GAAP and should be considered in addition to, and not as a
substitute for, return on assets, net earnings, total assets or
other GAAP financial measures. Our method of calculating a
non-GAAP financial measure 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 ROIC is return on assets. The
following shows the components to reconcile the return on assets
calculation to Adjusted ROIC:
|
Four Quarters
Ended
|
|
February 3,
2024
|
January 28,
2023
|
Net earnings
|
$134
|
$245
|
Income tax
expense
|
13
|
92
|
Interest
expense
|
137
|
138
|
Earnings before
interest and income tax expense
|
284
|
475
|
|
|
|
Operating lease
interest1
|
86
|
85
|
Non-operating related
adjustments2
|
316
|
38
|
Adjusted net operating
profit
|
686
|
598
|
Adjusted estimated
income tax expense3
|
(172)
|
(162)
|
Adjusted net
operating profit after tax
|
$514
|
$436
|
|
|
|
Average total
assets
|
$8,766
|
$9,069
|
Average noncurrent
deferred property incentives in excess of operating lease
right-of-use (ROU) assets4
|
(157)
|
(197)
|
Average non-interest
bearing current liabilities
|
(2,954)
|
(3,185)
|
Non-operating related
adjustments5
|
394
|
—
|
Adjusted average
invested capital
|
$6,049
|
$5,687
|
|
|
|
Return on
assets
|
1.5 %
|
2.7 %
|
Adjusted
ROIC
|
8.5 %
|
7.7 %
|
|
|
1
|
Operating lease
interest is a component of operating lease cost recorded in
occupancy costs. We add back operating lease interest for purposes
of calculating adjusted net operating profit for consistency with
the treatment of interest expense on our debt.
|
2
|
Non-operating related
adjustments primarily relate to the wind-down of our Canadian
operations for the four quarters ended February 3, 2024 and supply
chain impairment and related charges, partially offset by the gain
on sale of our interest in a corporate office building for the four
quarters ended January 28, 2023. See the Adjusted EBIT and Adjusted
EBITDA section, as well as our 2022 Annual Report, for detailed
information on certain non-operating related
adjustments.
|
3
|
Adjusted estimated
income tax expense is calculated by multiplying the adjusted net
operating profit by the adjusted effective tax rate (which removes
the impact of non-operating related adjustments) for the trailing
twelve-month periods ended February 3, 2024 and January 28, 2023.
The adjusted effective tax rate is calculated by dividing adjusted
income tax by adjusted earnings before income taxes for the same
trailing twelve-month periods.
|
4
|
For leases with
property incentives that exceed the ROU assets, we reclassify the
amount from assets to other current liabilities and other
liabilities on the Consolidated Balance Sheets. The current and
noncurrent amounts are used to reduce average total assets above,
as this better reflects how we manage our
business.
|
5
|
Non-operating related
adjustments primarily relate to the wind-down of our Canadian
operations for the trailing twelve-month period ended February 3,
2024.
|
NORDSTROM, INC.
ADJUSTED DEBT TO
EBITDAR (NON-GAAP FINANCIAL MEASURE)
(unaudited; dollars 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, as it provides a reflection of our
creditworthiness which could impact our credit ratings and
borrowing costs. This metric is calculated in accordance with the
updates in our Revolver covenant and is a key component in
assessing whether our revolving credit facility is secured or
unsecured, as well as our ability to make dividend payments and
share repurchases. Our goal is to manage debt levels to achieve and
maintain investment-grade credit ratings while operating with an
efficient capital structure.
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 GAAP financial measures. Our method of calculating a
non-GAAP financial measure 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 shows the components to reconcile the debt
to net earnings calculation to Adjusted debt to EBITDAR:
|
February 3,
2024
|
Debt
|
$2,862
|
Operating lease
liabilities
|
1,617
|
Adjusted
debt
|
$4,479
|
|
|
Four Quarters Ended
February 3, 2024
|
Net
earnings
|
$134
|
Income tax
expense
|
13
|
Interest expense,
net
|
104
|
Earnings before
interest and income taxes
|
$251
|
|
|
Depreciation and
amortization expenses
|
586
|
Operating lease
cost1
|
278
|
Amortization of
developer reimbursements2
|
69
|
Canada wind-down
costs
|
284
|
Supply chain asset
impairment and related charge
|
32
|
Other Revolver covenant
adjustments3
|
36
|
Adjusted
EBITDAR
|
$1,536
|
|
|
Debt to Net
Earnings
|
21.4
|
Adjusted debt to
EBITDAR
|
2.9
|
|
|
1
|
Operating lease cost is
fixed rent expense, including fixed common area maintenance
expense, net of developer reimbursement amortization.
|
2
|
Amortization of
developer reimbursements is a non-cash reduction of operating lease
cost and is therefore added back to operating lease cost for
purposes of our Revolver covenant calculation.
|
3
|
Other adjusting items
to reconcile net earnings to Adjusted EBITDAR as defined by our
Revolver covenant include interest income, certain non-cash charges
and other gains and losses where relevant. For the four quarters
ended February 3, 2024, other Revolver covenant adjustments
primarily included interest income.
|
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, we believe it provides
investors with a meaningful analysis of our ability to generate
cash from our business.
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 calculating a
non-GAAP financial measure 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:
|
Year
Ended
|
|
February 3,
2024
|
January 28,
2023
|
Net cash provided by
operating activities
|
$621
|
$946
|
Capital
expenditures
|
(569)
|
(473)
|
Change in cash book
overdrafts
|
2
|
(14)
|
Free Cash
Flow
|
$54
|
$459
|
INVESTOR
CONTACT:
|
|
James Duies
|
|
|
Nordstrom,
Inc.
|
|
|
InvRelations@Nordstrom.com
|
|
|
|
MEDIA
CONTACT:
|
|
Stephanie
Corzett
|
|
|
Nordstrom,
Inc.
|
|
|
NordstromPR@Nordstrom.com
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/nordstrom-reports-fourth-quarter-2023-earnings-302080324.html
SOURCE Nordstrom, Inc.