NORDSTROM, INC. (Exact Name of Registrant As Specified in Its Charter)
Total Page:16
File Type:pdf, Size:1020Kb
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) February 23, 2017 NORDSTROM, INC. (Exact name of registrant as specified in its charter) Washington 001-15059 91-0515058 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1617 Sixth Avenue, Seattle, Washington 98101 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (206) 628-2111 Inapplicable (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ___ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ___ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ___ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition On February 23, 2017, Nordstrom, Inc. issued an earnings release announcing its results of operations for the quarter and year ended January 28, 2017, its financial position as of January 28, 2017, and its cash flows for the year ended January 28, 2017. A copy of this earnings release is attached as Exhibit 99.1. ITEM 7.01 Regulation FD Disclosure On February 23, 2017, Nordstrom, Inc. issued an earnings release announcing its results of operations for the quarter and year ended January 28, 2017, its financial position as of January 28, 2017, and its cash flows for the year ended January 28, 2017. A copy of this earnings release is attached as Exhibit 99.1. The information furnished in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, except as shall be expressly set forth by a specific reference in such filing. ITEM 9.01 Financial Statements and Exhibits 99.1 Nordstrom earnings release dated February 23, 2017 relating to the Company's results of operations for the quarter and year ended January 28, 2017, its financial position as of January 28, 2017, and its cash flows for the year ended January 28, 2017. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NORDSTROM, INC. (Registrant) /s/ Robert B. Sari Robert B. Sari Executive Vice President, General Counsel and Corporate Secretary Date: February 23, 2017 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 99.1 Nordstrom earnings release dated February 23, 2017 relating to the Company's results of operations for the quarter and year ended January 28, 2017, its financial position as of January 28, 2017, and its cash flows for the year ended January 28, 2017. Exhibit 99.1 FOR RELEASE: INVESTOR CONTACT: Trina Schurman February 23, 2017 at 1:05 PM PST Nordstrom, Inc. (206) 303-6503 Nordstrom Fourth Quarter and Fiscal 2016 Earnings Exceeded Expectations Achieved Record Sales of $14.5 Billion, Operating Model Improvements SEATTLE, Wash. (February 23, 2017) – Nordstrom, Inc. (NYSE: JWN) today reported fourth quarter earnings that exceeded expectations, reflecting continuous improvements to its operating model. Earnings per diluted share for the fourth quarter ended January 28, 2017 was $1.15, and when excluding the fourth quarter tax effect of the Trunk Club goodwill impairment, adjusted earnings per diluted share was $1.37. Fourth quarter results also included a non- operational gain of $0.10, which was not reflected in the Company's outlook. Net sales increased 2.4 percent and comparable sales decreased 0.9 percent. For fiscal 2016, earnings per diluted share of $2.02 exceeded the Company's expectations driven by continued operational efficiencies in inventory and expense execution. Excluding the Trunk Club impairment charge, adjusted earnings per diluted share was $3.14, above the Company's outlook of $2.85 to $2.95. Net sales increased 2.9 percent and comparable sales decreased 0.4 percent. In 2016, the Company reached record sales of $14.5 billion, achieving the following milestones in executing its growth plans: • continued market expansion into Canada for a total of five full-line stores, including two Toronto store openings in fall 2016, contributed $300 million in total sales • Nordstrom.com sales reached over $2.5 billion, representing approximately 25 percent of Nordstrom full-price sales • Nordstrom Rack sales grew 11 percent to $4.5 billion driven by 21 new store openings and 32 percent online growth; Nordstromrack.com/HauteLook reached $700 million, representing over 15 percent of off-price sales • Nordstrom Rewards active customers increased by 56 percent to 7.8 million; sales from Nordstrom Rewards customers represented 44 percent of sales • generated $1.6 billion in operating cash flow and $0.6 billion in free cash flow FOURTH QUARTER SUMMARY • Fourth quarter net earnings were $201 million and earnings before interest and taxes (EBIT) was $424 million, or 10.0 percent of net sales, compared with net earnings of $180 million and EBIT of $324 million, or 7.8 percent of net sales for the same period in fiscal 2015. • Retail EBIT increased $84 million compared with the same quarter last year, reflecting non-operational items in 2016 and 2015. Excluding these items, Retail EBIT increased $12 million, or 3.3 percent. • Credit EBIT increased $16 million, primarily due to higher credit card revenues. • Total Company net sales of $4.2 billion for the fourth quarter increased 2.4 percent compared with net sales of $4.1 billion during the same period in fiscal 2015. Total Company comparable sales for the fourth quarter decreased 0.9 percent. • In the Nordstrom brand, including U.S. and Canada full-line stores and Nordstrom.com, net sales, when combined with Trunk Club, decreased 1.1 percent and comparable sales decreased 2.7 percent. • Across U.S. full-line stores and Nordstrom.com, the top-performing merchandise categories were Women's Apparel and Beauty. The younger customer-focused departments in Women's Apparel continued to outperform, reflecting strength in denim and collaborations with new and emerging limited distribution brands. The East was the top-performing geographic region. • In the Nordstrom Rack brand, which consists of Nordstrom Rack stores and Nordstromrack.com/HauteLook, net sales increased 10.7 percent and comparable sales increased 4.3 percent. The East was the top-performing geographic region. • Retail gross profit, as a percentage of net sales, of 36.0 percent increased 112 basis points compared with the same period in fiscal 2015, reflecting strong inventory execution in addition to reduced competitive markdowns. Inventory declined 2.5 percent which reflected a positive spread of 5 percentage points relative to sales growth. • Selling, general and administrative expenses, as a percentage of net sales, of 27.6 percent decreased 60 basis points compared with the same period in fiscal 2015 primarily due to asset impairment charges of $50 million in 2015 and a non-operational legal settlement gain of $22 million in 2016. This was partially offset by performance-related costs associated with company performance. • During the quarter, the Company repurchased 4.0 million shares of its common stock for $189 million. A total of approximately $1.0 billion remains under existing share repurchase board authorizations, including the recent February 2017 authorization. The actual number, price, manner and timing of future share repurchases, if any, will be subject to market and economic conditions and applicable Securities and Exchange Commission rules. FULL YEAR SUMMARY • Full year net earnings were $354 million and EBIT was $0.8 billion, or 5.6 percent of net sales, compared with net earnings of $600 million and EBIT of $1.1 billion, or 7.8 percent of net sales, for the same period in fiscal 2015. • Retail EBIT decreased $210 million relative to last year, primarily due to asset impairment charges and other non-operational items in 2016 and 2015. Excluding these items, Retail EBIT decreased $55 million, or 5.7 percent, primarily due to higher technology and fulfillment costs supporting multi-channel growth. • Credit EBIT decreased $86 million relative to last year due to the revenue-sharing program associated with the sale of the credit card receivables in October 2015. • Total Company net sales of $14.5 billion for fiscal year 2016 increased 2.9 percent compared with net sales of $14.1 billion during the same period in fiscal 2015. Total Company comparable sales for the fiscal year 2016 decreased 0.4 percent. • Retail gross profit, as a percentage of net sales, of 34.9 percent decreased 7 basis points compared with fiscal 2015. • Selling, general and administrative expenses, as a percentage of net sales, of 29.8 percent increased 19 basis points compared with fiscal 2015. The Company made meaningful progress in improving operational efficiencies, reflected by moderated expense growth related to technology, supply chain and marketing of 10 percent, relative to an annual average of 20 percent over the past five years. • Return on invested capital (ROIC) for the 12 months ended January 28, 2017 was 8.4 percent compared with 10.7 percent in the prior 12-month period.