Second Quarter 2015 Earnings In-Line with
Expectations
Nordstrom, Inc. (NYSE: JWN) today reported earnings per diluted
share of $1.09 for the second quarter ended August 1, 2015.
This included an increase in earnings per diluted share of $0.16,
which primarily represented the reclassification of receivables as
"held for sale" associated with the pending credit card
transaction.
The Company's second quarter performance, which was in-line with
Company expectations, reflected the execution of its customer
strategy and continued top-line strength fueled by its growth
investments. Total Company net sales increased 9.2 percent, marking
the fourth consecutive quarter of high-single-digit growth. The
Company's strategic growth investments, including its entry into
Canada, the acquisition of Trunk Club and launch of
Nordstromrack.com, drove over one-third of the total sales growth
in the second quarter.
Total Company comparable sales increased 4.9 percent, compared
with the same period last year, reflecting consistent trends over
the past year. In addition, the Anniversary Sale, which is the
Company's largest event of the year, achieved Company
expectations.
CREDIT CARD TRANSACTION UPDATE
On May 26, 2015, the Company announced its strategic credit card
relationship with TD Bank (TD), including the sale of its existing
U.S. Visa and private label consumer credit card portfolio. The
Company also entered into a program agreement with TD, in which it
will be entitled to a substantial portion of net revenue generated
by the credit card portfolio.
Upon closing, the Company expects to receive approximately $1.8
billion, net of $325 million in debt reduction and transaction
costs. While the Company is continuing to evaluate its plans for
the use of proceeds, it intends to fund its long-term growth
through current operations and maintain its current capital
structure.
In the second quarter, the Company reclassified its receivables
to "held for sale" resulting in the reduction of expense. The
Company will provide a further update on the overall financial
impact of the transaction following closing, which is expected by
the end of the year and subject to regulatory approval.
SECOND QUARTER SUMMARY
- Second quarter net earnings were $211
million and earnings before interest and taxes were $377 million,
or 10.5 percent of net sales.
- This included an increase in earnings
before interest and taxes of $51 million, which primarily
represented the reclassification of receivables to "held for sale"
associated with the credit card transaction.
- In addition, the impact of the Trunk
Club acquisition and the ongoing entry into Canada represented a
planned incremental reduction to earnings before interest and taxes
of $14 million.
- Total Company net sales of $3.6 billion
for the second quarter increased 9.2 percent compared with net
sales of $3.3 billion during the same period in fiscal 2014. Total
Company comparable sales for the second quarter increased 4.9
percent.
- Nordstrom comparable sales, which
consist of the full-line and Nordstrom.com businesses, increased
4.8 percent. Top-performing merchandise categories included
Cosmetics and Women's Apparel. The strength in Women's Apparel was
led by coats, dresses and younger customer-focused departments.
- Full-line net sales of $2.1 billion
increased 1.1 percent compared with the same period last year.
Comparable sales increased 0.8 percent, reflecting ongoing
improvement in sales trends. The Southwest and Southeast were the
top-performing geographic regions.
- Nordstrom.com net sales increased 20
percent, primarily driven by continued expansion of merchandise
selection.
- Net sales in the off-price business
increased 16 percent compared with the same period last year.
- Nordstrom Rack net sales of $0.9
billion increased 13 percent, compared with the same period in
fiscal 2014, representing 26 consecutive quarters of double-digit
growth. Nordstrom Rack comparable sales increased 1.7 percent, on
top of last year's increase of 4.0 percent, consistent with its
two-year stacked trend.
- Nordstromrack.com/HauteLook net sales
increased 50 percent for the second consecutive quarter.
- Gross profit of $1.3 billion, or 35.3
percent of net sales, decreased 6 basis points compared with the
same period in fiscal 2014.
- Ending inventory increase of 11
percent, compared with the same period last year, was consistent
with expectations and reflected planned growth initiatives related
to Trunk Club and Canada. This increase was relatively in-line with
the net sales increase of 9.2 percent.
- Selling, general and administrative
expenses of $1.0 billion, or 29.1 percent of net sales, increased
86 basis points compared with the same period in fiscal 2014, due
to planned growth initiatives related to Trunk Club and Canada and
higher fulfillment costs associated with online growth.
- The Nordstrom Rewards loyalty program
continued to contribute to overall results, with members shopping
three times more frequently and spending four times more on average
than non-members. The Company opened approximately 350,000 new
accounts in the second quarter. With 4.5 million active members,
sales from members increased 10 percent in the second quarter and
represented 44 percent of sales.
- During the second quarter, the Company
repurchased 3.1 million shares of its common stock for $233
million. A total of $736 million remains available under its
existing share repurchase board authorization. The actual number
and timing of future share repurchases, if any, will be subject to
market and economic conditions and applicable Securities and
Exchange Commission rules.
- Return on invested capital (ROIC) for
the 12 months ended August 1, 2015 was 11.9 percent compared
with 13.2 percent in the prior 12-month period. This decrease
reflected the acquisition of Trunk Club in addition to ongoing
store expansion and increased technology investments. A
reconciliation of this non-GAAP financial measure to the closest
GAAP measure is included.
EXPANSION UPDATE
During the first half of the year, the Company opened two
full-line stores and 11 Nordstrom Rack stores. In the third
quarter, the Company plans to open three full-line stores
(Vancouver, BC, Canada; Minneapolis, Minnesota; and Milwaukee,
Wisconsin), relocate a full-line store in Los Angeles, California
and open 16 Nordstrom Rack stores. The Company opened the following
store in the second quarter of 2015:
Location Store Name Square
Footage
(000's)
Timing Nordstrom Rack
Dublin, California Persimmon Place 35 May 7 Number of stores
August 1, 2015 August 2, 2014 Nordstrom
full-line - U.S.
116 117 Nordstrom full-line - Canada
2 — Nordstrom Rack
178 151 Other1
8 3
Total 304 271 1 Other includes our Trunk Club
clubhouses, Jeffrey boutiques and our Last Chance store.
Gross square footage 27,556,000 26,442,000
FISCAL YEAR 2015 OUTLOOK
The Company updated its annual earnings per diluted share
expectations, incorporating second quarter results, including the
reclassification of receivables as "held for sale" associated with
the pending credit card transaction and share repurchases in the
second quarter. Nordstrom's expectations for fiscal 2015 are as
follows:
Prior Outlook Current
Outlook, excluding credit transaction and other,
net Current Outlook
Net sales increase (percent) 7 to 9 8.5 to 9.5 8.5 to
9.5 Comparable sales increase (percent) 2 to 4 3.5 to 4.5 3.5 to
4.5 Gross profit % (basis points) 5 to 15 decrease 5 decrease to 5
increase 5 decrease to 5 increase Selling, general and
administrative expenses % (basis points) 55 to 65 increase 65 to 75
increase 65 to 75 increase Credit transaction and other, net -- --
$51 million EBIT increase Earnings per diluted share (excluding the
impact of any future share repurchases) $3.65 to $3.80 $3.70 to
$3.80 $3.85 to $3.95
CONFERENCE CALL INFORMATION
The Company's senior management will host a conference call to
discuss second quarter 2015 results and fiscal 2015 outlook at 4:45
p.m. Eastern Daylight Time today. To listen to the live call online
and view the speakers' prepared remarks, the conference call slides
and Performance Summary document, visit the Investor Relations
section of the Company's corporate website at
http://investor.nordstrom.com. An archived webcast with the
speakers' prepared remarks, the conference call slides and
Performance Summary document will be available in the Quarterly
Earnings 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
13615018, until the close of business on August 20, 2015.
ABOUT NORDSTROM
Nordstrom, Inc. is a leading fashion specialty retailer based in
the U.S. Founded in 1901 as a shoe store in Seattle, today
Nordstrom operates 304 stores in 38 states and Canada. Customers
are served at 118 Nordstrom stores in the U.S. and Canada; 178
Nordstrom Rack stores; two Jeffrey boutiques; and one clearance
store. Additionally, customers are served online through
Nordstrom.com, Nordstromrack.com and HauteLook. The company also
owns Trunk Club, a personalized clothing service serving customers
online at TrunkClub.com and its five clubhouses. 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, anticipated financial
outlook for the fiscal year ending January 30, 2016,
anticipated annual total and comparable sales rates, anticipated
new store openings in existing, new and international markets,
anticipated Return on Invested Capital and trends in our
operations. Such statements are based upon the current beliefs and
expectations of the company's management and are subject to
significant risks and uncertainties. Actual future results may
differ materially from historical results or current expectations
depending upon factors including, but not limited to: successful
execution of our customer strategy, including expansion into new
domestic and international markets, acquisitions, investments in
our stores and online, our ability to realize the anticipated
benefits from growth initiatives and our ability to provide a
seamless experience across all channels; 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; our ability to manage the investment opportunities
in our online business and our ability to manage related
organizational changes; our ability to maintain relationships with
our employees and to effectively attract, develop and retain our
future leaders; effective inventory management, disruptions in our
supply chain and our ability to control costs; the impact of any
systems 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; successful execution
of our information technology strategy; our ability to effectively
utilize data in strategic planning and decision making; efficient
and proper allocation of our capital resources; our ability to
successfully close the U.S. Visa and private label credit card
portfolio transaction; our ability to safeguard our reputation and
maintain our vendor relationships; the impact of economic and
market conditions and the resultant impact on consumer spending
patterns; our ability to respond to the business environment,
fashion trends and consumer preferences, including changing
expectations of service and experience in stores and online; the
effectiveness of planned advertising, marketing and promotional
campaigns in the highly competitive retail industry; weather
conditions, natural disasters, health hazards, national security or
other market disruptions, or the prospects of these events and the
resulting impact on consumer spending patterns; our compliance with
applicable banking-related laws and regulations impacting our
ability to extend credit to our customers, employment laws and
regulations, certain international laws and regulations, other laws
and regulations applicable to us, including the outcome of claims
and litigation and resolution of tax matters, and ethical
standards; impact of the current regulatory environment and
financial system and health care reforms; compliance with debt
covenants, availability and cost of credit, changes in interest
rates, debt repayment patterns, personal bankruptcies and bad debt
write-offs; and the timing and amounts of share repurchases by the
company, if any, or any share issuances by the company, including
issuances associated with option exercises or other matters. Our
SEC reports, including our Form 10-K for the fiscal year ended
January 31, 2015, and our Form 10-Q for the fiscal quarter
ended May 2, 2015, contain other information on these and other
factors that could affect our financial results and cause actual
results to differ materially from any forward-looking information
we may provide. The company undertakes no obligation to update or
revise any forward-looking statements to reflect subsequent events,
new information or future circumstances.
NORDSTROM, INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited; amounts in millions, except per share amounts)
Quarter Ended Six Months Ended August 1, 2015
August 2, 2014 August 1, 2015 August
2, 2014 Net sales
$ 3,598 $ 3,296
$
6,714 $ 6,133 Credit card revenues
103 96
202 190 Total revenues
3,701
3,392
6,916 6,323 Cost of sales and related buying and
occupancy costs
(2,327 ) (2,130 )
(4,326
) (3,951 ) Selling, general and administrative expenses
(1,048 ) (931 )
(2,019 ) (1,776 )
Credit transaction and other, net
51 —
51 — Earnings before interest and income taxes
377 331
622 596 Interest expense, net
(32
) (35 )
(65 ) (70 ) Earnings before income
taxes
345 296
557 526 Income tax expense
(134
) (113 )
(218 ) (203 )
Net earnings
$ 211 $ 183
$ 339
$ 323 Earnings per share: Basic
$ 1.11
$ 0.97
$ 1.78 $ 1.70 Diluted
$ 1.09 $
0.95
$ 1.74 $ 1.68 Weighted-average shares
outstanding: Basic
189.4 189.6
190.0 189.7 Diluted
193.5 192.7
194.2 192.7
NORDSTROM, INC.
CONSOLIDATED
BALANCE SHEETS
(unaudited; amounts in millions) August 1,
2015 January 31, 2015 August 2, 2014
Assets Current assets: Cash and cash equivalents
$
423 $ 827 $ 772 Accounts receivable held for sale
2,391 — — Accounts receivable, net
241 2,306 2,454
Merchandise inventories
2,004 1,733 1,805 Current deferred
tax assets, net
256 256 260 Prepaid expenses and other
117 102 96 Total current assets
5,432 5,224 5,387 Land, property and equipment (net
of accumulated depreciation of $4,912, $4,698 and $4,587)
3,570 3,340 3,096 Goodwill
447 435 175 Other assets
251 246 248
Total assets
$ 9,700 $ 9,245 $ 8,906
Liabilities and Shareholders' Equity Current liabilities:
Accounts payable
$ 1,589 $ 1,328 $ 1,529 Accrued
salaries, wages and related benefits
389 416 358 Other
current liabilities
1,145 1,048 944 Current portion of
long-term debt
333 8 7 Total current
liabilities
3,456 2,800 2,838 Long-term debt, net
2,808 3,123 3,111 Deferred property incentives, net
560 510 498 Other liabilities
385 372 358
Commitments and contingencies Shareholders' equity: Common
stock, no par value: 1,000 shares authorized; 188.2, 190.1 and
188.6 shares issued and outstanding
2,460 2,338 1,958
Retained earnings
97 166 179 Accumulated other comprehensive
loss
(66 ) (64 ) (36 ) Total shareholders' equity
2,491 2,440 2,101
Total liabilities
and shareholders' equity $ 9,700 $ 9,245
$ 8,906
NORDSTROM, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited; amounts in millions) Six Months
Ended August 1, 2015 August 2, 2014
Operating Activities Net earnings
$ 339 $ 323
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization expenses
277 244 Amortization of deferred property incentives and
other, net
(41 ) (40 ) Deferred income taxes, net
(24 ) (43 ) Stock-based compensation expense
41 31 Tax benefit from stock-based compensation
13 10
Excess tax benefit from stock-based compensation
(13
) (11 ) Bad debt expense
20 22 Credit transaction and
other, net
(54 ) — Change in operating assets and
liabilities: Accounts receivable
(216 ) (221 )
Merchandise inventories
(280 ) (263 ) Prepaid
expenses and other assets
(19 ) (11 ) Accounts
payable
240 241 Accrued salaries, wages and related benefits
(30 ) (35 ) Other current liabilities
56 68
Deferred property incentives
97 48 Other liabilities
9 6 Net cash provided by operating activities
415 369
Investing Activities
Capital expenditures
(521 ) (376 ) Change in credit
card receivables originated at third parties
(64 )
(77 ) Other, net
4 (9 ) Net cash used in investing
activities
(581 ) (462 )
Financing
Activities Proceeds from long-term borrowings, net of discounts
16 13 Principal payments on long-term borrowings
(4
) (4 ) Increase in cash book overdrafts
49 15 Cash
dividends paid
(142 ) (125 ) Payments for repurchase
of common stock
(267 ) (326 ) Proceeds from issuances
under stock compensation plans
71 91 Excess tax benefit from
stock-based compensation
13 11 Other, net
26
(4 ) Net cash used in financing activities
(238 )
(329 ) Net decrease in cash and cash equivalents
(404
) (422 ) Cash and cash equivalents at beginning of period
827 1,194
Cash and cash equivalents at end
of period $ 423 $ 772
NORDSTROM, INC.STATEMENTS OF EARNINGS BY
BUSINESS(unaudited; dollar and share amounts in
millions)
Retail Business
Our Retail Business includes our Nordstrom branded full-line
stores and online store, Nordstrom Rack stores,
Nordstromrack.com/HauteLook, Trunk Club, Jeffrey and our Last
Chance clearance store. It also includes unallocated corporate
center expenses. The following table summarizes the results of our
Retail Business for the quarter and six months ended August 1, 2015
compared with the same period in 2014:
Quarter Ended August 1, 2015 August
2, 2014 Amount % of net sales1
Amount % of net sales1 Net sales
$ 3,598 100.0 % $ 3,296 100.0 % Cost of
sales and related buying and occupancy costs
(2,326 )
(64.6 %) (2,129 ) (64.6 %) Gross profit
1,272
35.4 % 1,167 35.4 % Selling, general and
administrative expenses
(999 ) (27.8 %)
(889 ) (27.0 %) Other loss
(10 ) (0.3
%) — — Earnings before interest and income
taxes
263 7.3 % 278 8.5 % Interest expense,
net
(27 ) (0.8 %) (30 ) (0.9 %)
Earnings before income taxes $ 236
6.6 % $ 248 7.5 %
Six Months
Ended August 1, 2015 August 2, 2014 Amount
% of net sales1 Amount % of net
sales1 Net sales
$ 6,714 100.0
% $ 6,133 100.0 % Cost of sales and related buying and
occupancy costs
(4,323 ) (64.4 %)
(3,949 ) (64.4 %) Gross profit
2,391 35.6 %
2,184 35.6 % Selling, general and administrative expenses
(1,920 ) (28.6 %) (1,682 ) (27.4 %)
Other loss
(10 ) (0.1 %) — —
Earnings before interest and income taxes
461
6.9 % 502 8.2 % Interest expense, net
(55
) (0.8 %) (61 ) (1.0 %)
Earnings before
income taxes $ 406 6.0 % $
441 7.2 %
1 Subtotals and totals may not foot due to rounding.
The following table summarizes net sales within our Retail
Business:
Quarter Ended Six Months Ended
August 1, 2015 August 2, 2014 August 1,
2015 August 2, 2014 Nordstrom full-line stores -
U.S.
$ 2,097 $ 2,074
$ 3,796 $ 3,757
Nordstrom.com
625 519
1,105 920
Nordstrom
2,722 2,593
4,901 4,677 Nordstrom
Rack
857 759
1,688 1,500 Nordstromrack.com/HauteLook
117 78
234 155 Other retail1
79 8
143 16 Total Retail segment
3,775 3,438
6,966 6,348 Corporate/Other
(177
) (142 )
(252 ) (215 )
Total net sales
$ 3,598 $ 3,296
$ 6,714
$ 6,133
1 Other retail includes Trunk Club, our Nordstrom Canada
full-line stores and Jeffrey boutiques.
NORDSTROM, INC.STATEMENTS OF EARNINGS BY
BUSINESS(unaudited; dollar and share amounts in
millions)
Credit
Our Credit business earns finance charges, interchange fees,
late fees and other revenue through operation of the Nordstrom
private label and Nordstrom Visa credit cards. As mentioned above,
as part of an agreement expected to close by the end of 2015, TD
will acquire Nordstrom's existing U.S. Visa and private label
consumer credit card portfolio.
Historically, all credit card receivables were recorded at par
value less an allowance for credit losses. As we have the ability
and intent to sell our U.S. Visa and private label receivables,
these credit card receivables to be acquired by TD have been
reclassified from "held for investment" to "held for sale", and are
recorded at the lower of cost (par) or fair value as of
August 1, 2015. Due to this classification change, the
allowance on these receivables of $64 was reversed during the
quarter ended August 1, 2015. The fair value of these
receivables is greater than cost.
The following tables summarize the results of our Credit
business for the quarter and six months ended August 1, 2015
compared with the same period in 2014:
Quarter Ended Six Months Ended
August 1, 2015 August 2, 2014 August 1,
2015 August 2, 2014 Credit card revenues
$
103 $ 96
$ 202 $ 190 Credit expenses
(50 ) (43 )
(102 ) (96 ) Credit
transaction, net
61 —
61 —
Earnings before interest and income taxes
114 53
161 94 Interest expense
(5 ) (5 )
(10
) (9 )
Earnings before income taxes $
109 $ 48
$ 151 $ 85
Quarter Ended Six Months Ended
August 1, 2015 August 2, 2014 August 1,
2015 August 2, 2014 Allowance at beginning of
period
$ 70 $ 80
$ 75 $ 80 Bad debt
expense
10 7
20 22 Write-offs
(18 ) (19
)
(38 ) (38 ) Recoveries
3 12
8 16
Credit transaction - reversal of allowance for credit losses
(64 ) —
(64 ) —
Allowance at end of period $ 1 $ 80
$ 1 $ 80 Annualized net
write-offs as a percentage of average credit card receivables
2.7 % 1.4 %
2.7 % 2.1 %
August 1, 2015 August 2, 2014 30 days or more
delinquent as a percentage of ending credit card receivables
1.7 % 1.5 %
NORDSTROM, INC.RETURN ON INVESTED CAPITAL (NON-GAAP FINANCIAL
MEASURE)(unaudited; dollar and share amounts in
millions)
We believe ROIC is a useful financial measure for investors in
evaluating the efficiency and effectiveness of our use of capital
and believe ROIC is an important component of shareholders' return
over the long term. In addition, we incorporate ROIC in our
executive incentive compensation measures. For the 12 fiscal months
ended August 1, 2015, our ROIC decreased to 11.9% compared
with 13.2% for the 12 fiscal months ended August 2, 2014,
primarily due to the acquisition of Trunk Club in addition to
ongoing store expansion and increased technology investments.
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. The financial
measure calculated under GAAP which is most directly comparable to
ROIC is return on assets. The following is a reconciliation of the
components of ROIC and return on assets:
12 Fiscal Months Ended August 1, 2015
August 2, 2014 Net earnings
$ 736 $ 727 Add:
income tax expense
481 453 Add: interest expense
133
156 Earnings before interest and income tax expense
1,350 1,336 Add: rent expense
154 133 Less:
estimated depreciation on capitalized operating leases1
(83
) (71 ) Less: credit transaction and other, net
(51
) — Net operating profit
1,370 1,398
Less: estimated income tax expense2
(542 ) (536 )
Net operating profit after tax $ 828 $
862 Average total assets3
$ 9,275 $
8,618 Less: average non-interest-bearing current liabilities4
(2,892 ) (2,577 ) Less: average deferred property
incentives3
(521 ) (495 ) Add: average estimated
asset base of capitalized operating leases5
1,117
1,005
Average invested capital $ 6,979
$ 6,551
Return on assets 7.9
% 8.4 %
ROIC 11.9 % 13.2 %
1 Capitalized operating leases is our best estimate of the asset
base we would record for our leases that are classified as
operating if they had met the criteria for a capital lease, or we
had purchased the property. Asset base is calculated as described
in footnote 5 below.2 Based upon our effective tax rate multiplied
by the net operating profit for the 12 fiscal months ended
August 1, 2015 and August 2, 2014.3 Based upon the
trailing 12-month average.4 Based upon the trailing 12-month
average for accounts payable, accrued salaries, wages and related
benefits, and other current liabilities.5 Based upon the trailing
12-month average of the monthly asset base. 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 described in footnote 1.
NORDSTROM, INC.ADJUSTED DEBT TO EBITDAR (NON-GAAP FINANCIAL
MEASURE)(unaudited; 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 less than four times. As of August 1, 2015 and
August 2, 2014, our Adjusted Debt to EBITDAR was 2.1.
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:
2015(1 ) 2014(1 ) Debt
$ 3,141 $ 3,118
Add: estimated capitalized operating lease liability2
1,231
1,060 Less: fair value hedge adjustment included in long-term debt
(30 ) (42 )
Adjusted Debt
$ 4,342 $ 4,136 Net earnings
$ 736 $ 727 Add: income tax expense
481 453
Add: interest expense, net
133 155 Earnings
before interest and income taxes
1,350 1,335 Add:
depreciation and amortization expenses
541 478 Add: rent
expense
154 133 Add: non-cash acquisition-related charges
16 5
EBITDAR $ 2,061
$ 1,951
Debt to Net Earnings 4.3
4.3
Adjusted Debt to EBITDAR 2.1 2.1
1 The components of Adjusted Debt are as of August 1, 2015
and August 2, 2014, while the components of EBITDAR are for
the 12 months ended August 1, 2015 and August 2, 2014.2
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.
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 six months ended August 1, 2015, we had negative
Free Cash Flow of $(263) compared with $(194) for the six months
ended August 2, 2014.
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:
Six Months Ended August 1, 2015
August 2, 2014 Net cash provided by operating activities
$ 415 $ 369 Less: capital expenditures
(521
) (376 ) Less: cash dividends paid
(142 ) (125
) Less: change in credit card receivables originated at third
parties
(64 ) (77 ) Add: increase in cash book
overdrafts
49 15
Free Cash Flow
$ (263 ) $ (194 ) Net cash used in
investing activities
$ (581 ) $ (462 ) Net
cash used in financing activities
(238 ) (329 )
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Nordstrom, Inc.INVESTOR CONTACT: Trina Schurman,
206-303-6503MEDIA CONTACT: Salimah Karmali, 206-303-3118
Grafico Azioni Nordstrom (NYSE:JWN)
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Da Giu 2024 a Lug 2024
Grafico Azioni Nordstrom (NYSE:JWN)
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Da Lug 2023 a Lug 2024