ROTH CAPITAL PARTNERS: Hosting 27th Growth Stock Conference March 8-11 in Dana Point, Calif.
Details on Industry Insight.
SEATTLE--(BUSINESS WIRE)-- Nordstrom, Inc. (NYSE:JWN - News) today reported net earnings of $232 million, or $1.04 per diluted share, for the fourth quarter ended January 29, 2011. This represented an increase of 35 percent compared with net earnings of $172 million, or $0.77 per diluted share, for the same quarter last year.
Fourth quarter same-store sales increased 6.7 percent compared with the same period in fiscal 2009. Net sales in the fourth quarter were $2.82 billion, an increase of 10.9 percent compared with net sales of $2.54 billion during the same period in fiscal 2009. Additionally, total net sales of $9.31 billion for fiscal 2010 were the highest in the company’s history.
FOURTH QUARTER SUMMARY
Nordstrom’s fourth quarter performance was a continuation of the positive trends experienced during 2010.
Multi-channel same-store sales increased 7.2 percent compared with the same period in fiscal 2009. Top-performing multi-channel merchandise categories included jewelry, dresses and shoes.
The South and Midwest regions were the top-performing geographic areas for full-line stores relative to the fourth quarter of 2009.
Nordstrom Rack net sales increased $93 million, or 24.1 percent compared with the same period in fiscal 2009. Same-store sales increased 3.9 percent compared with the same period in fiscal 2009.
Gross profit, as a percentage of net sales, increased 34 basis points compared with last year’s fourth quarter. The improvement was mainly driven by the ability to leverage buying and occupancy expenses during the quarter. The company ended the quarter with sales per square foot up 6.0 percent and inventory per square foot up 3.8 percent compared with the fourth quarter of 2009. Nordstrom ended the year with inventory turn of 5.6, an all-time high for the company.
Retail selling, general and administrative expenses increased $66 million compared with last year’s fourth quarter. Higher sales volume and new stores accounted for the majority of this increase, with the remainder coming primarily from increased investments in marketing and technology. The company continues to make investments to improve the customer experience both online and within the stores.
The Credit segment continues to improve. Customer payment rates are increasing, resulting in improved delinquency and write-off trends. Delinquencies as a percentage of credit card receivables at the end of the fourth quarter were 3.0 percent, which was reduced from 3.5 percent at the end of the third quarter of 2010 and reduced from 5.3 percent at the end of the fourth quarter of 2009. As a result, the reserve for bad debt was reduced by $15 million.
Earnings before interest and taxes increased $96 million to $406 million, or 13.9 percent of total revenues, from $310 million, or 11.8 percent of total revenues, in last year’s fourth quarter.
FULL YEAR RESULTS
For the fiscal year ended January 29, 2011, net earnings were up $172 million to $613 million, an increase of 39 percent compared with net earnings of $441 million for the fiscal year ended January 30, 2010. Earnings per diluted share for the same periods were $2.75 and $2.01, respectively.
Full year same-store sales increased 8.1 percent compared with fiscal 2009. Net sales for the year were a record $9.31 billion, an increase of 12.7 percent compared with prior year net sales of $8.26 billion.
CAPITAL INVESTMENT AND EXPANSION UPDATE
In fiscal 2011, the company’s capital expenditures, net of property incentives, are expected to total between $400 and $440 million, compared with approximately $304 million in fiscal 2010.
During the fourth quarter of 2010, the company opened a 36,000-square-foot Nordstrom Rack store at Arrowhead Crossing in Peoria, Arizona. In 2011, Nordstrom has announced plans to open the following stores:
Location, Store Name, Square
Nordstrom Full-Line Stores
Newark, Delaware Christiana Mall 122 April 8
Nashville, Tennessee The Mall at Green Hills 149 September 16
St. Louis, Missouri Saint Louis Galleria 143 September 23
Nordstrom Rack Stores
Aventura, Florida The Promenade Shops 35 March 3
Austin, Texas Sunset Valley Village 34 March 10
Arlington, Texas The Parks at Arlington Mall 32 March 17
Fremont, California Pacific Commons 35 March 24
Charlotte, North Carolina Carolina Pavilion 43 March 31
Lakewood, Colorado Belmar 35 April 28
Boulder, Colorado1 Twenty Ninth Street 35 April 28
Cherry Hill, New Jersey Towne Place at Garden State Park 36 May 5
Washington, D.C. Friendship Center 41 May 19
Annapolis, Maryland Annapolis Harbour Center 32 May 19
West Covina, California West Covina Mall 37 Fall
Redondo Beach, California South Bay Center 35 Fall
Tucson, Arizona The Corner 33 Fall
Indianapolis, Indiana Rivers Edge 35 Fall
Sugar Land, Texas The Market at Town Center 35 Fall
Henderson, Nevada2 Stephanie Street Center 35 Fall
Burlington, Massachusetts Middlesex Commons 38 Fall
Tigard, Oregon Cascade Plaza 45 Fall
Lenexa, Kansas Orchard Corners 40 Fall
Nordstrom plans to relocate its Nordstrom Rack store at Flatiron Marketplace in Broomfield, Colorado to the Twenty Ninth Street shopping center in Boulder, Colorado.
Nordstrom plans to relocate its Nordstrom Rack store at Silverado Ranch Plaza in Las Vegas, Nevada to Stephanie Street Center in Henderson, Nevada.
FISCAL YEAR 2011 OUTLOOK
In fiscal 2011, Nordstrom plans to build from its strong financial framework to improve profitability, enhance free cash flow, increase return on invested capital and maintain a healthy balance sheet. For the 2011 fiscal year, Nordstrom expects same-store sales to increase 2 to 4 percent, which yields earnings per share in the range of $2.95 to $3.10 for the full year.
The company’s expectations for fiscal 2011 are as follows:
Same-store sales 2 to 4 percent increase
Credit card revenues $0 to $10 million increase
Gross profit (%) 10 basis point decrease to 10 basis point increase
Retail selling, general and administrative expense ($) $120 to $160 million increase
Credit selling, general and administrative expense ($) $0 to $10 million decrease
Total selling, general and administrative expense (%) 45 to 65 basis point decrease
Interest expense, net $0 to $5 million decrease
Effective tax rate 39.0 percent
Earnings per diluted share $2.95 to $3.10
Diluted shares outstanding 223.3 million
In 2011, the company will report same-store sales for the total company, Nordstrom and Nordstrom Rack, which is consistent with our branding. “Nordstrom” (formerly referred to as “Multi-channel”) includes Nordstrom full-line stores and Direct. The consolidation of full-line and Direct sales reflects the company’s recognition that the customer does not differentiate between the two channels, and is consistent with how the company plans and manages the business.
CONFERENCE CALL INFORMATION
The company’s senior management will host a conference call to discuss fourth quarter results at 4:45 p.m. Eastern Standard Time today. To listen, please dial 517-308-9140 (passcode: NORD). A telephone replay will be available beginning approximately one hour after the conclusion of the call by dialing 203-369-1322 (passcode: 6673) until the close of business on February 24, 2011. Interested parties may also listen to the live call over the Internet by visiting the Investor Relations section of the company’s corporate Web site at http://investor.nordstrom.com. An archived webcast will be available in the webcasts section through May 18, 2011.
Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 204 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 115 Nordstrom full-line stores, 86 Nordstrom Racks, two Jeffrey boutiques and one clearance store. Nordstrom also serves customers through its online presence at www.nordstrom.com and through its catalogs. Nordstrom, Inc.’s common stock is publicly traded on the NYSE under the symbol JWN.