- Strong sales growth at both banners during first
quarter
- Nordstrom Rack net sales up double-digits, with comparable
sales up 8 percent
- Gross profit constrained due to timing and other
factors
- Reaffirms fiscal 2024 outlook
SEATTLE, May 30, 2024
/PRNewswire/ -- Nordstrom, Inc. (NYSE: JWN) today reported a
first quarter net loss of $39
million, or loss per share of $0.24, and loss before interest and taxes of
$21 million.
For the first quarter ended May 4, 2024, net sales
increased 5.1 percent versus the same period in fiscal 2023, and
total Company comparable sales increased 3.8 percent. Gross
merchandise value ("GMV") increased 4.9 percent. First quarter net
sales include a 75 basis point negative impact from the wind-down
of Canadian operations. During the quarter, Nordstrom banner net
sales increased 0.6 percent and comparable sales increased 1.8
percent. Net sales for Nordstrom Rack increased 13.8 percent and
comparable sales increased 7.9 percent.
"The positive sales growth we saw across the company in the
first quarter is very encouraging, and we're particularly excited
about the progress that our Rack banner is making," said
Erik Nordstrom, chief executive
officer of Nordstrom, Inc. "While we're pleased with our topline
growth, profitability fell short of our expectations. Looking
ahead, our strong sales performance gives us momentum heading into
the rest of the year and the confidence to reaffirm our 2024
guidance."
In the first quarter, active, kids' apparel and women's apparel
had strong double-digit growth versus 2023, and beauty increased by
high single-digits.
"We're set up well going forward in regards to the health of our
inventory, both in managing levels and providing compelling content
with good sell-through," said Pete
Nordstrom, president of Nordstrom, Inc. "As we reflect on
the legacy that our dad left behind, we've been reminded of his
firmly held and consistent values—especially his commitment to
serving our customers. Those values have been integral to
Nordstrom's growth, and they remain at the core of the decisions we
make as a company. We want to thank our teams for bringing our
values to life as we stay focused on our priorities for 2024."
As previously announced, on May 22, 2024, the board of
directors declared a quarterly cash dividend of $0.19 per share, payable on June 19, 2024,
to shareholders of record at the close of business on June 4,
2024.
FIRST QUARTER 2024 SUMMARY
- Total Company net sales increased 5.1 percent and comparable
sales increased 3.8 percent compared with the same period in fiscal
2023. GMV increased 4.9 percent. The wind-down of Canadian
operations had a negative impact on total Company net sales of 75
basis points, as the first quarter of 2023 included one month of
Canadian sales.
- Nordstrom banner net sales increased 0.6 percent and comparable
sales increased 1.8 percent compared with the same period in fiscal
2023. GMV increased 0.3 percent. The wind-down of Canadian
operations had a negative impact on Nordstrom banner net sales of
110 basis points.
- Nordstrom Rack banner net sales increased 13.8 percent and
comparable sales increased 7.9 percent compared with the same
period in fiscal 2023.
- Digital sales decreased 0.2 percent compared with the same
period in fiscal 2023. Digital sales represented 34 percent of
total sales during the quarter.
- Gross profit, as a percentage of net sales, of 31.6 percent
decreased 225 basis points compared with the same period in fiscal
2023. The strength in first quarter sales drove strong gross profit
and leverage, which were more than offset primarily by timing
matters related to both higher loyalty activity and reserves, as
well as external theft in the Company's transportation network and
inventory cleanup in the Company's supply chain as facilities are
consolidated.
- Ending inventory decreased 6.3 percent compared with the same
period in fiscal 2023, versus a 5.1 percent increase in sales.
- Selling, general and administrative expenses, as a percentage
of net sales, of 35.8 percent decreased 20 basis points compared
with the same period in fiscal 2023, primarily due to leverage on
higher sales and improvements in variable costs in supply chain and
across the business, partially offset by higher labor costs.
- Loss before interest and taxes was $21
million in the first quarter of 2024, compared with loss
before interest and taxes of $259
million during the same period in fiscal 2023. Adjusted
earnings before interest and taxes ("EBIT") of $50 million in the first quarter of 2023 excluded
one-time charges of $309 million
related to the wind-down of Canadian operations.1
- Interest expense, net, of $27
million decreased from $28
million during the same period in fiscal 2023.
- Income tax benefit was $9
million, or 17.5 percent of pretax loss, compared with
income tax benefit of $82 million, or
28.6 percent of pretax loss, in the same period in fiscal 2023. The
effective tax rate decreased in the first quarter of 2024, compared
with the same period in fiscal 2023, primarily due to nonrecurring
tax benefits related to the wind-down of Canadian operations in
2023. Excluding the impacts of the Canada wind-down, the rate decrease was due to
the impact of unfavorable stock-based compensation on pretax loss
in 2024, compared with pretax earnings in 2023.
- The Company ended the first quarter with $1.2 billion in available liquidity, including
$428 million in cash. The Company
strengthened its financial position in April by retiring the
$250 million notes that were due
using cash on hand.
STORES UPDATE
During and subsequent to the first quarter of 2024, the Company
opened nine stores:
City
|
|
Location
|
|
Square
Footage
(000s)
|
|
Timing
of Opening
|
Nordstrom
Rack
|
|
|
|
|
|
|
Pinole, CA
|
|
Pinole Vista
Crossing
|
|
23
|
|
March 7,
2024
|
Snellville,
GA
|
|
Presidential
Markets
|
|
35
|
|
March 7,
2024
|
Kennesaw,
GA
|
|
Barrett
Place
|
|
25
|
|
March 21,
2024
|
Macedonia,
OH
|
|
Macedonia
Gateway
|
|
28
|
|
April 11,
2024
|
Gilroy, CA
|
|
Gilroy
Crossing
|
|
25
|
|
April 25,
2024
|
Jacksonville Beach,
FL
|
|
South Beach
Regional
|
|
30
|
|
May 2, 2024
|
Queen Creek,
AZ
|
|
Queen Creek
Marketplace
|
|
28
|
|
May 16, 2024
|
Elk Grove,
CA
|
|
The Ridge Elk
Grove
|
|
25
|
|
May 30, 2024
|
Wheaton, IL
|
|
Danada Square
East
|
|
29
|
|
May 30, 2024
|
The Company has also announced plans to open the following
stores:
City
|
|
Location
|
|
Square
Footage
(000s)
|
|
Timing of
Opening
|
Nordstrom
Rack
|
|
|
|
|
|
|
Oceanside,
CA
|
|
Pacific Coast
Plaza
|
|
31
|
|
June 6, 2024
|
Bay Shore,
NY
|
|
Gardiner Manor
Mall
|
|
24
|
|
June 13,
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
|
Apple Valley,
MN
|
|
Fischer
Marketplace
|
|
30
|
|
Spring 2025
|
The Company had the following store counts as of
quarter-end:
|
May 4,
2024
|
|
April 29,
2023
|
Nordstrom
|
|
|
|
Nordstrom
|
93
|
|
94
|
Nordstrom Local
service hubs
|
6
|
|
7
|
ASOS |
Nordstrom
|
—
|
|
1
|
Nordstrom
Rack
|
|
|
|
Nordstrom
Rack
|
264
|
|
243
|
Last Chance clearance
stores
|
2
|
|
2
|
Total
|
365
|
|
347
|
|
Gross store square
footage
|
26,425,000
|
|
26,259,000
|
FISCAL YEAR 2024 OUTLOOK
The Company reaffirmed its 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 2023
- EBIT margin of 3.5 to 4.0 percent of sales
- Income tax rate of approximately 27 percent
- Earnings per share ("EPS") of $1.65 to $2.05,
excluding the impact of share repurchase activity, if any
CONFERENCE CALL INFORMATION
The Company's senior management will host a conference call to
provide a business update and to discuss first quarter 2024
financial results and fiscal 2024 outlook at 4:45 p.m.
EDT 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 13746681, until the close of business on June 6,
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 February 3, 2024, and our Form 10-Q
for the fiscal quarter ended May 4,
2024, to be filed with the SEC on or about June 7, 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 as
well as the effect of the Company's announcement of the exploration
of possible avenues to enhance shareholder value and the formation
of a special committee of the board of directors to consider any
proposal which might be brought forward by members of the Nordstrom
family to take the Company private. 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. This earnings release includes
references to websites, website addresses and additional materials,
including reports and blogs, found on those websites. The content
of any websites and materials named, hyperlinked or otherwise
referenced in this earnings release are not incorporated by
reference into this earnings release or in any other report or
document we file with the SEC, and any references to such websites
and materials are intended to be inactive textual references only.
The information on those websites is not part of this earnings
release.
|
|
|
|
|
|
1
Adjusted EBIT is a non-GAAP financial measure. 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.
|
NORDSTROM,
INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited; amounts in
millions, except per share amounts)
|
|
|
Quarter
Ended
|
|
May 4,
2024
|
|
April 29,
2023
|
Net sales
|
$3,221
|
|
$3,064
|
Credit card revenues,
net
|
114
|
|
117
|
Total
revenues
|
3,335
|
|
3,181
|
Cost of sales and
related buying and occupancy costs
|
(2,203)
|
|
(2,028)
|
Selling, general and
administrative expenses
|
(1,153)
|
|
(1,103)
|
Canada wind-down
costs
|
—
|
|
(309)
|
Loss before interest
and income taxes
|
(21)
|
|
(259)
|
Interest expense,
net
|
(27)
|
|
(28)
|
Loss before income
taxes
|
(48)
|
|
(287)
|
Income tax
benefit
|
9
|
|
82
|
Net
loss
|
($39)
|
|
($205)
|
|
|
|
|
Loss per
share:
|
|
|
|
Basic
|
($0.24)
|
|
($1.27)
|
Diluted
|
($0.24)
|
|
($1.27)
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
Basic
|
163.2
|
|
160.8
|
Diluted
|
163.2
|
|
160.8
|
|
|
|
|
Percent of net
sales:
|
|
|
|
Gross
profit
|
31.6 %
|
|
33.8 %
|
Selling, general and
administrative expenses
|
35.8 %
|
|
36.0 %
|
Loss before interest
and income taxes
|
(0.6 %)
|
|
(8.5 %)
|
NORDSTROM,
INC.
CONSOLIDATED BALANCE
SHEETS
(unaudited; amounts in
millions)
|
|
|
May 4,
2024
|
|
February 3,
2024
|
|
April 29,
2023
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$428
|
|
$628
|
|
$581
|
Accounts receivable,
net
|
361
|
|
334
|
|
279
|
Merchandise
inventories
|
2,095
|
|
1,888
|
|
2,237
|
Prepaid expenses and
other current assets
|
334
|
|
286
|
|
414
|
Total current
assets
|
3,218
|
|
3,136
|
|
3,511
|
|
|
|
|
|
|
Land, property and
equipment (net of accumulated depreciation of
$8,391, $8,251 and $8,133)
|
3,130
|
|
3,177
|
|
3,197
|
Operating lease
right-of-use assets
|
1,373
|
|
1,359
|
|
1,393
|
Goodwill
|
249
|
|
249
|
|
249
|
Other assets
|
506
|
|
523
|
|
478
|
Total
assets
|
$8,476
|
|
$8,444
|
|
$8,828
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$1,471
|
|
$1,236
|
|
$1,674
|
Accrued salaries,
wages and related benefits
|
302
|
|
244
|
|
246
|
Current portion of
operating lease liabilities
|
245
|
|
240
|
|
249
|
Other current
liabilities
|
1,117
|
|
1,102
|
|
1,236
|
Current portion of
long-term debt
|
—
|
|
250
|
|
249
|
Total current
liabilities
|
3,135
|
|
3,072
|
|
3,654
|
|
|
|
|
|
|
Long-term debt,
net
|
2,614
|
|
2,612
|
|
2,608
|
Noncurrent operating
lease liabilities
|
1,379
|
|
1,377
|
|
1,406
|
Other
liabilities
|
512
|
|
535
|
|
609
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Common stock, no par
value: 1,000 shares authorized; 163.6, 162.4
and 161.4 shares issued and outstanding
|
3,437
|
|
3,418
|
|
3,372
|
Accumulated
deficit
|
(2,609)
|
|
(2,578)
|
|
(2,824)
|
Accumulated other
comprehensive gain
|
8
|
|
8
|
|
3
|
Total shareholders'
equity
|
836
|
|
848
|
|
551
|
Total liabilities
and shareholders' equity
|
$8,476
|
|
$8,444
|
|
$8,828
|
NORDSTROM,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited; amounts in
millions)
|
|
|
Quarter
Ended
|
|
May 4,
2024
|
|
April 29,
2023
|
Operating
Activities
|
|
|
|
Net loss
|
($39)
|
|
($205)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization expenses
|
153
|
|
144
|
Canada wind-down
costs
|
—
|
|
220
|
Right-of-use asset
amortization
|
46
|
|
43
|
Deferred income taxes,
net
|
(5)
|
|
(16)
|
Stock-based
compensation expense
|
18
|
|
14
|
Other, net
|
(8)
|
|
(25)
|
Change in operating
assets and liabilities:
|
|
|
|
Merchandise
inventories
|
(147)
|
|
(296)
|
Other current and
noncurrent assets
|
(55)
|
|
(112)
|
Accounts
payable
|
165
|
|
301
|
Accrued salaries,
wages and related benefits
|
57
|
|
(39)
|
Lease
liabilities
|
(63)
|
|
(67)
|
Other current and
noncurrent liabilities
|
17
|
|
54
|
Net cash provided by
operating activities
|
139
|
|
16
|
|
|
|
|
Investing
Activities
|
|
|
|
Capital
expenditures
|
(91)
|
|
(106)
|
Decrease in cash and
cash equivalents resulting from Canada deconsolidation
|
—
|
|
(33)
|
Proceeds from the sale
of assets and other, net
|
9
|
|
16
|
Net cash used in
investing activities
|
(82)
|
|
(123)
|
|
|
|
|
Financing
Activities
|
|
|
|
Principal payments on
long-term debt
|
(250)
|
|
—
|
Change in cash book
overdrafts
|
23
|
|
29
|
Cash dividends
paid
|
(31)
|
|
(30)
|
Proceeds from
issuances under stock compensation plans
|
7
|
|
11
|
Other, net
|
(6)
|
|
(9)
|
Net cash (used in)
provided by financing activities
|
(257)
|
|
1
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
(200)
|
|
(106)
|
Cash and cash
equivalents at beginning of period
|
628
|
|
687
|
Cash and cash
equivalents at end of period
|
$428
|
|
$581
|
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 loss. 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 loss to adjusted EBIT
and adjusted EBITDA and net earnings as a percent of net sales to
adjusted EBIT margin:
|
Quarter
Ended
|
|
May 4,
2024
|
|
April 29,
2023
|
Net
loss
|
($39)
|
|
($205)
|
Income tax
benefit
|
(9)
|
|
(82)
|
Interest expense,
net
|
27
|
|
28
|
Loss before interest
and income taxes
|
(21)
|
|
(259)
|
Canada wind-down
costs
|
—
|
|
309
|
Adjusted
EBIT
|
(21)
|
|
50
|
Depreciation and
amortization expenses
|
153
|
|
144
|
Amortization of
developer reimbursements
|
(15)
|
|
(17)
|
Adjusted
EBITDA
|
$117
|
|
$177
|
|
|
|
|
Net
sales
|
$3,221
|
|
$3,064
|
Net
loss as a % of net sales
|
(1.2 %)
|
|
(6.7 %)
|
EBIT margin
%
|
(0.6 %)
|
|
(8.5 %)
|
Adjusted EBIT margin
%
|
(0.6 %)
|
|
1.6 %
|
The following is a reconciliation of diluted EPS to adjusted
EPS:
|
Quarter
Ended
|
|
May 4,
2024
|
|
April 29,
2023
|
Diluted
EPS
|
($0.24)
|
|
($1.27)
|
Canada wind-down
costs
|
—
|
|
1.92
|
Income tax impact on
adjustments1
|
—
|
|
(0.58)
|
Adjusted
EPS
|
($0.24)
|
|
$0.07
|
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 and
ASOS | Nordstrom prior to December
2023. 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 first quarter of 2024,
compared with the first quarter of 2023:
|
Quarter
Ended
|
|
May 4,
2024
|
|
April 29,
2023
|
Net
sales:
|
|
|
|
Nordstrom
|
$2,040
|
|
$2,027
|
Nordstrom
Rack
|
1,181
|
|
1,037
|
Total net
sales
|
$3,221
|
|
$3,064
|
|
|
|
|
Net sales increase
(decrease):
|
|
|
|
Nordstrom
|
0.6 %
|
|
(11.4 %)
|
Nordstrom
Rack
|
13.8 %
|
|
(11.9 %)
|
Total
Company
|
5.1 %
|
|
(11.6 %)
|
|
|
|
|
Digital sales as %
of total net sales1
|
34 %
|
|
36 %
|
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.
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
|
|
May 4,
2024
|
|
April 29,
2023
|
Net
earnings
|
$299
|
|
$20
|
Income tax expense
(benefit)
|
86
|
|
(8)
|
Interest
expense
|
138
|
|
138
|
Earnings before
interest and income tax expense
|
523
|
|
150
|
|
|
|
|
Operating lease
interest1
|
87
|
|
85
|
Non-operating related
adjustments2
|
7
|
|
387
|
Adjusted net operating
profit
|
617
|
|
622
|
Adjusted estimated
income tax expense3
|
(151)
|
|
(164)
|
Adjusted net
operating profit after tax
|
$466
|
|
$458
|
|
|
|
|
Average total
assets
|
$8,712
|
|
$9,061
|
Average noncurrent
deferred property incentives in excess of operating lease
right-of-use
(ROU) assets4
|
(147)
|
|
(188)
|
Average non-interest
bearing current liabilities
|
(2,986)
|
|
(3,203)
|
Non-operating related
adjustments5
|
98
|
|
122
|
Adjusted average
invested capital
|
$5,677
|
|
$5,792
|
|
|
|
|
Return on
assets
|
3.4 %
|
|
0.2 %
|
Adjusted
ROIC
|
8.2 %
|
|
7.9 %
|
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 included a supply chain asset impairment and
related charge for the four quarters ended May 4, 2024, as well as
the wind-down of our Canadian operations for the four quarters
ended May 4, 2024 and April 29, 2023. See the Adjusted EBIT and
Adjusted EBITDA section, as well as our 2023 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 May 4, 2024 and April 29, 2023. The
adjusted effective tax rate is calculated by dividing adjusted
income tax expense 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 Condensed 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 periods ended May 4, 2024
and April 29, 2023.
|
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.
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:
|
May 4,
2024
|
Debt
|
$2,614
|
Operating lease
liabilities
|
1,624
|
Adjusted
debt
|
$4,238
|
|
|
|
Four Quarters
Ended
May 4, 2024
|
Net
earnings
|
$299
|
Income tax
expense
|
86
|
Interest expense,
net
|
104
|
Earnings before
interest and income taxes
|
489
|
|
|
Depreciation and
amortization expenses
|
594
|
Operating lease
cost1
|
282
|
Amortization of
developer reimbursements2
|
67
|
Other Revolver covenant
adjustments3
|
41
|
Adjusted
EBITDAR
|
$1,473
|
|
|
Debt to Net
Earnings
|
8.7
|
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 May 4, 2024, other Revolver covenant adjustments primarily
included interest income and a supply chain asset impairment and
related charge, partially offset by Canada wind-down adjustments.
See our 2023 Annual Report for detailed information on certain
non-operating related adjustments.
|
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:
|
Quarter
Ended
|
|
May 4,
2024
|
|
April 29,
2023
|
Net cash provided by
operating activities
|
$139
|
|
$16
|
Capital
expenditures
|
(91)
|
|
(106)
|
Change in cash book
overdrafts
|
23
|
|
29
|
Free Cash
Flow
|
$71
|
|
($61)
|
INVESTOR
CONTACT:
|
|
James Duies
|
|
|
Nordstrom,
Inc.
|
|
|
InvRelations@Nordstrom.com
|
|
|
|
MEDIA
CONTACT:
|
|
Stephanie
Corzett
|
|
|
Nordstrom,
Inc.
|
|
|
NordstromPR@Nordstrom.com
|
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SOURCE Nordstrom, Inc.