SEATTLE,
March 1, 2022 /PRNewswire/
-- Nordstrom, Inc. (NYSE: JWN) today reported fourth quarter
results in line with the Company's fiscal year 2021 outlook,
demonstrating progress against its long-term growth strategy. The
Company reported net earnings of $200
million, or $1.23 per diluted
share ("EPS"), and earnings before interest and taxes ("EBIT") of
$299 million, or 6.8 percent of
sales, for the fourth quarter. For the fiscal year ended
January 29, 2022, net earnings were $178 million and diluted EPS was $1.10, with EBIT of $492
million, or 3.4 percent of sales. Net earnings for the
fiscal year included an $88 million
debt refinancing charge ($65 million
after tax, or diluted EPS of $0.40)
in the first quarter.
For the fourth quarter ended January 29, 2022, net
sales increased 23 percent versus the same period in fiscal 2020
and decreased 1 percent versus the same period in fiscal 2019.
Gross merchandise value ("GMV") increased 24 percent versus the
same period in fiscal 2020 and was flat versus the same period in
fiscal 2019. Nordstrom banner net sales were flat and GMV increased
2 percent compared with the fourth quarter of 2019. Net sales for
Nordstrom Rack decreased 5 percent versus the fourth quarter of
fiscal 2019, a sequential improvement of 320 basis points over the
third quarter.
Sales in the home, active, designer, beauty and kids
categories had the strongest growth compared with the fourth
quarter of 2019. Geographically, Nordstrom banner sales in the
Southern markets, including Southern
California, outperformed the Northern markets by
approximately 7 percentage points. Suburban stores continued to be
stronger than urban stores in the fourth quarter.
"We advanced our strategic initiatives this quarter, with
sequential sales improvement, strong digital growth and a
significant increase in profitability," said Erik Nordstrom, chief executive officer of
Nordstrom, Inc. "Our team continues to work with urgency to
accelerate our progress and invest in our capabilities to better
serve customers and profitably grow sales. Our primary focus is on
three areas: improving Nordstrom Rack performance, increasing
profitability and optimizing our supply chain and inventory flow.
Our progress has given us line of sight to achieve in the coming
year the financial targets we presented at our 2021 Investor
Event."
The Company made significant progress on its merchandising
strategies throughout 2021, with choice count at an all-time high,
increasing 50 percent over last year, and more than 300 new brands
launched during the year. Additionally, alternative vendor
partnership models accounted for 10 percent of Nordstrom banner GMV
in the fourth quarter, up from 7 percent in 2019.
"We drove a significant increase in merchandise margin
this quarter, as we engaged customers through our compelling and
expanded holiday gift offering, while also reducing promotional
activity," said Pete Nordstrom,
president and chief brand officer of Nordstrom, Inc. "Looking
ahead, we are focused on more effectively balancing inventory with
demand while increasing efficiency throughout our network and
delivering newness and selection to our customers."
The Company continued to navigate global supply chain
disruptions throughout the quarter by accelerating receipts and
investing in improved in-stock levels. Inventory levels at the end
of the quarter were higher than planned, but the Company expects to
reduce its inventory relative to sales during the first quarter of
fiscal 2022.
Nordstrom continued to strengthen its financial position
and reduced its leverage ratio to 3.2 times at the end of fiscal
2021. Subject to the completion of certain year-end certification
requirements with its bank group, the Company anticipates that it
will be in a position to resume returning cash to shareholders in
the first quarter of fiscal 2022.
FOURTH QUARTER 2021 SUMMARY
- Total Company net sales in the fourth quarter increased
23 percent compared with the same period in fiscal 2020. Net sales
decreased 1 percent compared with the same period in fiscal 2019,
consistent with the third quarter of 2021. After taking into
account an approximately 200 basis point impact due to the timing
of this year's Anniversary Sale, fourth quarter sales improved
sequentially over the third quarter. Full-year revenue for fiscal
2021, including retail sales and credit card revenues, increased 38
percent compared with fiscal 2020. GMV was flat in the fourth
quarter and decreased 4 percent in fiscal 2021 when compared with
the same periods in 2019.
- For the Nordstrom banner, net sales in the fourth quarter
increased 23 percent compared with the same period in fiscal 2020
and were flat against the same period in fiscal 2019. GMV increased
2 percent and decreased 2 percent in the fourth quarter and in the
fiscal year, respectively, when compared with the same periods in
2019.
- For the Nordstrom Rack banner, net sales increased 23
percent and decreased 5 percent compared with the same periods in
fiscal 2020 and fiscal 2019, respectively. Fourth quarter net sales
were a sequential improvement of 320 basis points over the third
quarter of 2021.
- Digital sales in the fourth quarter decreased 1 percent
compared with the same period in fiscal 2020 and increased 23
percent compared with the same period in fiscal 2019. Digital sales
represented 44 percent of total sales during the quarter and 42
percent of sales for the fiscal year.
- Gross profit, as a percentage of net sales, of 38 percent
increased 500 basis points compared with the same period in fiscal
2020, and increased 340 basis points compared with the same period
in 2019, due to improved merchandise margins from reduced
markdowns, and increased leverage on buying and occupancy
costs.
- Ending inventory increased 19 percent compared with the
same period in fiscal 2019, versus a 1 percent decrease in sales.
Approximately half of the inventory increase versus 2019 was due to
planned investments to prioritize in-stock levels.
- Selling, general and administrative ("SG&A")
expenses, as a percentage of net sales, of 34 percent decreased 125
basis points compared with the same period in fiscal 2020,
primarily due to leverage on higher sales, partially offset by
labor cost pressure. SG&A expenses, as a percentage of net
sales, increased 340 basis points compared with the same period in
fiscal 2019 primarily as a result of fulfillment and labor cost
pressures, partially offset by the non-cash asset impairment in
2019 of $32 million resulting from
the integration of Trunk Club and continued benefit from resetting
the cost structure in 2020.
- EBIT was $299 million in
the fourth quarter of 2021, compared with $30 million during the same period in fiscal
2020, primarily due to higher sales volume and improved merchandise
margins, partially offset by labor cost pressure. EBIT was flat
versus the fourth quarter of fiscal 2019, which included the impact
of the Trunk Club impairment charge. EBIT margin was 6.8 percent of
sales for the quarter, which was 10 basis points higher than the
fourth quarter of 2019, and 3.4 percent for the fiscal
year.
- Interest expense, net, of $33
million decreased from $48
million during the same period in fiscal 2020 as a result of
the redemption of the 8.75% secured notes during the first quarter
of fiscal 2021 and the 4.0% unsecured notes during the second
quarter of fiscal 2021.
- Income tax expense during the fourth quarter was
$66 million, or 25 percent of pretax
earnings, compared with income tax benefit of $51 million in the same period of fiscal 2020.
Last year's income tax included benefits associated with the
Coronavirus Aid, Relief, and Economic Security Act ("CARES
Act").
- Fourth quarter net earnings of $200 million increased from $33 million during the same period in fiscal 2020
primarily due to higher sales volume and gross margin.
- The Company finished the year with $1.1 billion in liquidity including $322 million in cash and the full $800 million available on its revolving line of
credit, and a leverage ratio of 3.2 times.
FISCAL YEAR 2022 OUTLOOK
The Company has provided the following financial outlook
for fiscal 2022:
- Revenue growth, including retail sales and credit card
revenues, of 5 to 7 percent versus fiscal 2021
- EBIT margin of 5.6 to 6.0 percent of sales
- Income tax rate of approximately 27 percent
- Earnings per share of $3.15
to $3.50, excluding the impact of
share repurchase activity, if any
- Leverage ratio of approximately 2.5 times by
year-end
CONFERENCE CALL INFORMATION
The Company's senior management will host a conference
call to provide a business update and to discuss fourth quarter
2021 financial results and fiscal year 2022 outlook at 4:45 p.m. Eastern Standard Time 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 13726542, until the close of business on
March 8, 2022.
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 digital-first platform 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 30, 2021, its Form 10-Qs for
the fiscal quarters ended May 1, 2021, July 31, 2021 and
October 30, 2021, and our Form 10-K for the fiscal year ended
January 29, 2022, to be filed with the SEC on or about
March 11, 2022 . 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.
NORDSTROM,
INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited; amounts
in millions, except per share amounts)
|
|
|
Quarter Ended
|
|
Year Ended
|
|
January 29, 2022
|
|
January 30, 2021
|
|
January 29, 2022
|
|
January 30, 2021
|
Net sales
|
$
4,382
|
|
$
3,551
|
|
$
14,402
|
|
$
10,357
|
Credit card revenues,
net
|
104
|
|
94
|
|
387
|
|
358
|
Total
revenues
|
4,486
|
|
3,645
|
|
14,789
|
|
10,715
|
Cost of sales and
related buying and
occupancy costs
|
(2,699)
|
|
(2,365)
|
|
(9,344)
|
|
(7,600)
|
Selling, general and
administrative expenses
|
(1,488)
|
|
(1,250)
|
|
(4,953)
|
|
(4,162)
|
Earnings (loss)
before interest and income
taxes1
|
299
|
|
30
|
|
492
|
|
(1,047)
|
Interest expense,
net2
|
(33)
|
|
(48)
|
|
(246)
|
|
(181)
|
Earnings (loss)
before income taxes
|
266
|
|
(18)
|
|
246
|
|
(1,228)
|
Income tax (expense)
benefit
|
(66)
|
|
51
|
|
(68)
|
|
538
|
Net earnings (loss)1,2
|
$
200
|
|
$
33
|
|
$
178
|
|
$
(690)
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.26
|
|
$
0.21
|
|
$
1.12
|
|
$
(4.39)
|
Diluted1,2
|
$
1.23
|
|
$
0.21
|
|
$
1.10
|
|
$
(4.39)
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
159.5
|
|
157.9
|
|
159.0
|
|
157.2
|
Diluted
|
162.4
|
|
160.9
|
|
162.5
|
|
157.2
|
|
|
|
|
|
|
|
|
Percent of net
sales:
|
|
|
|
|
|
|
|
Gross
profit
|
38.4%
|
|
33.4%
|
|
35.1%
|
|
26.6%
|
Selling, general and
administrative expenses
|
34.0%
|
|
35.2%
|
|
34.4%
|
|
40.2%
|
Earnings (loss)
before interest and income taxes
|
6.8%
|
|
0.8%
|
|
3.4%
|
|
(10.1%)
|
|
|
1
|
In 2020, we incurred
COVID-19 related charges, which reduced net earnings for the year
ended January 30, 2021 by $192 or $1.22 per diluted share.
These charges
consisted primarily of asset impairments from store closures,
premium pay and benefits, and restructuring charges, which were
slightly offset by credits from the CARES Act.
|
2
|
In the first quarter
of 2021, we incurred charges related to our debt refinancing that
increased interest expense by $88. Collectively, these charges
reduced net earnings
for the year ended January 29, 2022 by $65 or $0.40 per
diluted share.
|
NORDSTROM,
INC.
CONSOLIDATED
BALANCE SHEETS
(unaudited; amounts
in millions)
|
|
January 29, 2022
|
|
January 30, 2021
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
322
|
|
$
681
|
Accounts receivable,
net
|
255
|
|
245
|
Merchandise
inventories
|
2,289
|
|
1,863
|
Prepaid expenses and
other1
|
306
|
|
853
|
Total current
assets
|
3,172
|
|
3,642
|
|
|
|
|
Land, property and
equipment (net of accumulated depreciation of $7,737 and
$7,159)
|
3,562
|
|
3,732
|
Operating lease
right-of-use assets
|
1,496
|
|
1,581
|
Goodwill
|
249
|
|
249
|
Other
assets
|
390
|
|
334
|
Total assets
|
$
8,869
|
|
$
9,538
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
1,529
|
|
$
1,960
|
Accrued salaries,
wages and related benefits
|
383
|
|
352
|
Current portion of
operating lease liabilities
|
242
|
|
260
|
Other current
liabilities
|
1,160
|
|
1,048
|
Current portion of
long-term debt
|
—
|
|
500
|
Total current
liabilities
|
3,314
|
|
4,120
|
|
|
|
|
Long-term debt,
net
|
2,853
|
|
2,769
|
Non-current operating
lease liabilities
|
1,556
|
|
1,687
|
Other
liabilities
|
565
|
|
657
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common stock, no par
value: 1,000 shares authorized; 159.4 and 157.8 shares issued
and
outstanding
|
3,283
|
|
3,205
|
Accumulated
deficit
|
(2,652)
|
|
(2,830)
|
Accumulated other
comprehensive loss
|
(50)
|
|
(70)
|
Total shareholders'
equity
|
581
|
|
305
|
Total liabilities and shareholders'
equity
|
$
8,869
|
|
$
9,538
|
|
|
1
|
As of January 30,
2021 prepaid expenses and other included $612 of taxes receivable
primarily related to CARES Act benefits. As of January 29, 2022
prepaid expenses and other included $18 of income taxes
receivable.
|
NORDSTROM,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited; amounts
in millions)
|
|
|
Year Ended
|
|
January 29, 2022
|
|
January 30, 2021
|
Operating Activities
|
|
|
|
Net earnings
(loss)
|
$
178
|
|
$
(690)
|
Adjustments to
reconcile net earnings (loss) to net cash provided by (used in)
operating
activities:
|
|
|
|
Depreciation and
amortization expenses
|
615
|
|
671
|
Asset
impairment
|
—
|
|
137
|
Right-of-use asset
amortization
|
175
|
|
168
|
Deferred income taxes,
net
|
(11)
|
|
(7)
|
Stock-based
compensation expense
|
79
|
|
67
|
Other, net
|
81
|
|
4
|
Change in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(10)
|
|
(46)
|
Merchandise
inventories
|
(383)
|
|
53
|
Prepaid expenses and
other assets
|
542
|
|
(607)
|
Accounts
payable
|
(400)
|
|
432
|
Accrued salaries,
wages and related benefits
|
31
|
|
(157)
|
Other current
liabilities
|
112
|
|
(143)
|
Lease
liabilities
|
(284)
|
|
(237)
|
Other
liabilities
|
(20)
|
|
7
|
Net cash provided by
(used in) operating activities
|
705
|
|
(348)
|
|
|
|
|
Investing Activities
|
|
|
|
Capital
expenditures
|
(506)
|
|
(385)
|
Other, net
|
(15)
|
|
38
|
Net cash used in
investing activities
|
(521)
|
|
(347)
|
|
|
|
|
Financing Activities
|
|
|
|
Proceeds from
revolving line of credit
|
400
|
|
800
|
Payments on revolving
line of credit
|
(400)
|
|
(800)
|
Proceeds from
long-term borrowings
|
675
|
|
600
|
Principal payments on
long-term borrowings
|
(1,100)
|
|
—
|
Decrease in cash book
overdrafts
|
(32)
|
|
(4)
|
Cash dividends
paid
|
—
|
|
(58)
|
Proceeds from
issuances under stock compensation plans
|
14
|
|
16
|
Tax withholding on
share-based awards
|
(15)
|
|
(9)
|
Other, net
|
(86)
|
|
(15)
|
Net cash (used in)
provided by financing activities
|
(544)
|
|
530
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
1
|
|
(7)
|
Net decrease in cash
and cash equivalents
|
(359)
|
|
(172)
|
Cash and cash
equivalents at beginning of year
|
681
|
|
853
|
Cash and cash equivalents at end of
year
|
$
322
|
|
$
681
|
NORDSTROM, INC.
SUMMARY OF NET SALES
(unaudited; amounts in
millions)
Our Nordstrom brand includes Nordstrom.com, TrunkClub.com,
Nordstrom-branded U.S. stores, Canada, which includes Nordstrom.ca, Nordstrom
Canadian stores and Nordstrom Rack Canadian stores, and Nordstrom
Local. Our Nordstrom Rack brand includes NordstromRack.com,
Nordstrom Rack-branded U.S. stores, Last Chance clearance stores
and, prior to the first quarter of 2021, HauteLook.com. The
following table summarizes net sales for the quarter and year ended
January 29, 2022, compared with the
quarter and year ended January 30,
2021:
|
Quarter Ended
|
|
Year Ended
|
|
January 29, 2022
|
|
January 30, 2021
|
|
January 29, 2022
|
|
January 30, 2021
|
Net sales:
|
|
|
|
|
|
|
|
Nordstrom
|
$
3,027
|
|
$
2,454
|
|
$
9,640
|
|
$
6,997
|
Nordstrom
Rack
|
1,355
|
|
1,097
|
|
4,762
|
|
3,360
|
Total net sales
|
$
4,382
|
|
$
3,551
|
|
$
14,402
|
|
$
10,357
|
|
|
|
|
|
|
|
|
Net sales increase (decrease):
|
|
|
|
|
|
|
|
Nordstrom
|
23.3%
|
|
(18.6%)
|
|
37.8%
|
|
(29.6%)
|
Nordstrom
Rack
|
23.5%
|
|
(22.9%)
|
|
41.7%
|
|
(35.3%)
|
Total Company
|
23.4%
|
|
(20.0%)
|
|
39.1%
|
|
(31.6%)
|
|
|
|
|
|
|
|
|
Digital sales as % of total net
sales1
|
44%
|
|
54%
|
|
42%
|
|
55%
|
|
|
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 include
a reserve for estimated returns.
|
NORDSTROM, INC.
ADJUSTED RETURN ON
INVESTED CAPITAL ("ADJUSTED ROIC")
(NON-GAAP FINANCIAL
MEASURE)
(unaudited; dollar 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.
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 is a
reconciliation of return on assets to Adjusted ROIC:
|
Four Quarters Ended
|
|
January 29, 2022
|
|
January 30, 2021
|
Net earnings
(loss)
|
$
178
|
|
$
(690)
|
Add (Less): income
tax expense (benefit)
|
68
|
|
(538)
|
Add: interest
expense
|
247
|
|
184
|
Earnings (loss)
before interest and income tax expense
|
493
|
|
(1,044)
|
|
|
|
|
Add: operating lease
interest1
|
87
|
|
95
|
Adjusted net
operating profit (loss)
|
580
|
|
(949)
|
|
|
|
|
(Less) Add: estimated
income tax (expense) benefit2
|
(159)
|
|
416
|
Adjusted net operating profit (loss) after
tax
|
$
421
|
|
$
(533)
|
|
|
|
|
Average total assets
|
$
9,301
|
|
$
9,718
|
Less: average
deferred property incentives in excess of ROU
assets3
|
(232)
|
|
(276)
|
Less: average
non-interest bearing current liabilities
|
(3,352)
|
|
(3,138)
|
Average invested capital
|
$
5,717
|
|
$
6,304
|
|
|
|
|
Return on assets4
|
1.9%
|
|
(7.1%)
|
Adjusted ROIC4
|
7.4%
|
|
(8.5%)
|
|
|
1
|
We add back the
operating lease interest to reflect how we manage our business.
Operating lease interest is a
component of operating lease cost recorded in occupancy
costs.
|
2
|
Estimated income tax
(expense) benefit is calculated by multiplying the adjusted net
operating profit (loss) by the effective tax rate for the trailing
twelve month periods ended January 29, 2022 and January 30, 2021.
The effective tax rate is calculated by dividing income tax expense
(benefit) by earnings (loss) before income taxes for the same
trailing twelve month periods.
|
3
|
For leases with
property incentives that exceed the ROU assets, we reclassify the
amount from assets to other current liabilities and other
liabilities and reduce average total assets, as this better
reflects how we manage our business.
|
4
|
COVID-19 related
charges for the four quarters ended January 30, 2021 negatively
impacted return on assets by approximately 200 basis points and
Adjusted ROIC by approximately 280 basis points.
|
NORDSTROM, INC.
ADJUSTED DEBT TO EBITDAR (NON-GAAP FINANCIAL
MEASURE)
(unaudited; dollar amounts in
millions)
Adjusted Debt to earnings before interest, income taxes,
depreciation, amortization and rent ("EBITDAR")is one
of our key financial metrics and we believe that our debt levels
are best analyzed using this measure, as it provides a reflection
of our creditworthiness which could impact our credit rating and
borrowing costs. This metric is calculated in accordance with 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 maintain an investment-grade credit
rating 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 following is a reconciliation of debt to net
earnings to Adjusted Debt to EBITDAR:
|
January 29, 2022
|
Debt
|
$
2,853
|
Add: estimated
capitalized operating lease liability1
|
1,373
|
Adjusted Debt
|
$
4,226
|
|
|
|
Four Quarters Ended
January 29, 2022
|
Net earnings
|
$
178
|
Add: income tax
expense
|
68
|
Add: interest
expense, net
|
246
|
Adjusted earnings
before interest and income taxes
|
$
492
|
|
|
Add: depreciation and
amortization expenses
|
615
|
Add: rent expense,
net2
|
229
|
Add: other Revolver
covenant adjustments3
|
1
|
Adjusted EBITDAR
|
$
1,337
|
|
|
Debt to Net Earnings
|
16.0
|
Adjusted Debt to EBITDAR
|
3.2
|
|
|
1
|
Based upon the
estimated lease liability as of the end of the period, calculated
as the trailing four quarters of rent expense multiplied by six, a
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 and is calculated
under the previous lease standard (ASC 840), consistent with our
Revolver covenant calculation requirements. The estimated lease
liability is not calculated in accordance with, nor an alternative
for, GAAP and should not be considered in isolation or as a
substitution for our results reported under GAAP.
|
2
|
Rent expense, net of
amortization of developer reimbursements, is added back for
consistency with our Revolver covenant calculation requirements,
and is calculated under the previous lease standard (ASC
840).
|
3
|
Other adjusting items
to reconcile net earnings to Adjusted EBITDAR as defined by our
Revolver covenant include interest income and certain non-cash
charges where relevant.
|
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
(used in) operating activities. The following is a reconciliation
of net cash provided by (used in) operating activities to Free Cash
Flow:
|
Year Ended
|
|
January 29, 2022
|
|
January 30, 2021
|
Net cash provided by (used in) operating
activities
|
$
705
|
|
$
(348)
|
Less: capital
expenditures
|
(506)
|
|
(385)
|
Less: change in cash
book overdrafts
|
(32)
|
|
(4)
|
Free Cash Flow
|
$
167
|
|
$
(737)
|
NORDSTROM, INC.
ADJUSTED EBITDA (NON-GAAP FINANCIAL
MEASURE)
(unaudited; amounts in millions)
Adjusted earnings (loss) before interest, income taxes,
depreciation and amortization ("EBITDA") is one of our key
financial metrics and, when used in conjunction with GAAP measures,
we believe it provides investors with a meaningful analysis of our
ability to generate pre-tax earnings and cash flow from our
operations. Adjusted EBITDA excludes significant items which are
non-operating in nature in order to evaluate our core operating
performance against prior periods. The financial measure calculated
under GAAP which is most directly comparable to Adjusted EBITDA is
net earnings.
Adjusted EBITDA is not a measure of financial performance
under GAAP and should be considered in addition to, and not as a
substitute for net earnings, overall change in cash or liquidity of
the business as a whole. Our method of 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 following is a reconciliation of net earnings (loss) to
Adjusted EBITDA:
|
Year Ended
|
|
January 29, 2022
|
|
January 30, 2021
|
Net earnings (loss)
|
$
178
|
|
$
(690)
|
Add (Less): income
tax expense (benefit)
|
68
|
|
(538)
|
Add: interest
expense, net
|
246
|
|
181
|
Earnings (loss)
before interest and income taxes
|
492
|
|
(1,047)
|
|
|
|
|
Add: depreciation and
amortization expenses
|
615
|
|
671
|
Less: amortization of
developer reimbursements
|
(78)
|
|
(86)
|
Add: asset
impairments
|
—
|
|
137
|
Adjusted EBITDA
|
$
1,029
|
|
$
(325)
|
INVESTOR CONTACT:
|
|
Heather
Hollander
|
|
|
Nordstrom,
Inc.
|
|
|
InvRelations@Nordstrom.com
|
|
|
|
MEDIA CONTACT:
|
|
Stephanie
Corzett
|
|
|
Nordstrom,
Inc.
|
|
|
NordstromPR@Nordstrom.com
|
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SOURCE Nordstrom, Inc.