☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Washington
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91-0515058
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common stock, without par value
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JWN
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New York Stock Exchange
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☑
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Large Accelerated Filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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•
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timely and effective implementation of our evolving business model and successful execution of our customer strategy to provide a differentiated and seamless experience across all Nordstrom channels,
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•
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our ability to execute and manage the costs of our evolving business model, including the execution of new supply chain capabilities and enhancement of existing ones, development of applications for electronic devices, improvement of customer-facing technologies, timely delivery of products purchased digitally, enhancement of inventory management systems, more fluid inventory availability between our digital channels and retail stores through our market strategy, and greater effectiveness in marketing strategies,
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•
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our ability to respond to the rapidly evolving business and retail environment, as well as fashion trends and consumer preferences, including our customers’ changing expectations of service and experience in stores and online,
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•
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our ability to properly balance our investments in existing and new store locations, technology and supply chain facilities, including the expansion of our market strategy,
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•
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successful execution of our information technology strategy, including engagement with third-party service providers,
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•
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our ability to effectively utilize internal and third-party data in strategic planning and decision making,
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•
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our ability to maintain or expand our presence, including timely completion of construction associated with new, relocated and remodeled stores, and Supply Chain Network facilities, all of which may be impacted by third parties, consumer demand and other natural or man-made disruptions,
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•
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efficient and proper allocation of our capital resources,
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•
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effective inventory management processes and systems, fulfillment and supply chain processes and systems, disruptions in our supply chain and our ability to control costs,
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•
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the impact of any systems or network 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,
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•
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our ability to safeguard our reputation and maintain relationships with our vendors and third-party service providers,
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•
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our ability to maintain relationships with and motivate our employees and to effectively attract, develop and retain our future leaders,
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•
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our ability to realize the expected benefits, respond to potential risks and appropriately manage costs associated with our program agreement with TD Bank, N.A.,
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•
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the effectiveness of our loyalty program, including the implementation of any changes in our program, planned advertising, marketing and promotional campaigns in the highly competitive and promotional retail industry,
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•
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market fluctuations, increases in operating costs, exit costs and overall liabilities and losses associated with owning and leasing real estate,
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•
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potential goodwill impairment charges, future impairment charges and fluctuations in the fair values of reporting units or of assets in the event projected financial results are not achieved within expected time frames,
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•
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compliance with debt and operating covenants, availability and cost of credit, changes in our credit rating and changes in interest rates,
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•
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the timing, price, manner and amounts of future share repurchases by us, if any, or any share issuances by us,
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•
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the impact of the seasonal nature of our business and cyclical customer spending,
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•
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the impact of economic and market conditions and the resultant impact on consumer spending and credit patterns,
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•
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the impact of economic, environmental or political conditions in the U.S. and countries where our third-party vendors operate,
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•
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weather conditions, natural disasters, health hazards, national security or other market and supply chain disruptions, including the effects of tariffs, or the prospects of these events and the resulting impact on consumer spending patterns or information technology systems and communications,
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•
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our compliance with applicable domestic and international laws, regulations and ethical standards, including those related to employment and tax, information security and privacy, consumer credit and the outcome of any claims and litigation and resolution of such matters,
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•
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the impact of the current regulatory environment and financial system, health care and tax reforms,
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•
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the impact of changes in accounting rules and regulations, changes in our interpretation of the rules or regulations, or changes in underlying assumptions, estimates or judgments,
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•
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the impact of claims, litigation and regulatory investigations, including those related to information security, privacy and consumer credit.
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Term
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Definition
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2002 Plan
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2002 Nonemployee Director Stock Incentive Plan
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2010 Plan
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2010 Equity Incentive Plan
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2019 Plan
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2019 Equity Incentive Plan
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2018 Annual Report
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Annual Report on Form 10-K filed on March 18, 2019
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Adjusted EBITDA
|
Adjusted earnings before interest, income taxes, depreciation and amortization (a non-GAAP financial measure)
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Adjusted EBITDAR
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Adjusted earnings before interest, income taxes, depreciation, amortization and rent (a non-GAAP financial measure)
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Adjusted ROIC
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Adjusted return on invested capital (a non-GAAP financial measure)
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ASC
|
Accounting Standards Codification
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ASU
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Accounting Standards Update
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CODM
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Chief operating decision maker
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Estimated Non-recurring Charge
|
Estimated non-recurring credit-related charge recognized during the third quarter of 2018
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Digital sales
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Online and digitally-assisted store sales, which include Online Order Pickup, Ship to Store and Style Board, a digital selling tool
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EBIT
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Earnings before interest and income taxes
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EPS
|
Earnings per share
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ESPP
|
Employee Stock Purchase Plan
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Exchange Act
|
Securities Exchange Act of 1934, as amended
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FASB
|
Financial Accounting Standards Board
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Third quarter of 2019
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13 fiscal weeks ending November 2, 2019
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Third quarter of 2018
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13 fiscal weeks ending November 3, 2018
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Fiscal year 2019
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52 fiscal weeks ending February 1, 2020
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Fiscal year 2018
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52 fiscal weeks ending February 2, 2019
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FLS
|
Full-line stores
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Full-Price
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Nordstrom U.S. FLS, Nordstrom.com, Canada, Trunk Club, Jeffrey and Nordstrom Local
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GAAP
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Generally accepted accounting principles
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Generational Investments
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NRHL, Canada, Trunk Club and Nordstrom NYC
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Gross profit
|
Net sales less cost of sales and related buying and occupancy costs
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Inventory turnover rate
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Trailing 4-quarter cost of sales and related buying and occupancy costs divided by the trailing 4-quarter average inventory
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IRS
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Internal Revenue Service
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Lease Standard
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ASU No. 2016-02, Leases, and all related amendments (ASC 842)
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LIBOR
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London Inter-bank Offered Rate
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MD&A
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Nordstrom Local
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Nordstrom Local neighborhood hubs
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Nordstrom NYC
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Our New York City flagship FLS store, including the Men’s location
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The Nordy Club
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Our customer loyalty program launched in October 2018
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NRHL
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Nordstromrack.com/HauteLook
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NYSE
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New York Stock Exchange
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Off-Price
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Nordstrom U.S. Rack stores, NRHL and Last Chance clearance stores
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Operating Lease Cost
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Fixed rent expense, including fixed common area maintenance expense, net of developer reimbursement amortization
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PCAOB
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Public Company Accounting Oversight Board (United States)
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Property incentives
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Developer and vendor reimbursements
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PSU
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Performance share unit
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Revolver
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Senior unsecured revolving credit facility
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ROU asset
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Operating lease right-of-use asset
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RSU
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Restricted stock unit
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SEC
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Securities and Exchange Commission
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Securities Act
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Securities Act of 1933, as amended
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SERP
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Unfunded defined benefit Supplemental Executive Retirement Plan
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SG&A
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Selling, general and administrative
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Supply Chain Network
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Fulfillment centers that process and ship orders to our customers, distribution centers that process and ship merchandise to our stores and other facilities and Omni-channel centers that both fulfill customer orders and ship merchandise to our stores
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TD
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Toronto-Dominion Bank, N.A.
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Quarter Ended
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Nine Months Ended
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||||||||||||
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November 2, 2019
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November 3, 2018
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November 2, 2019
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November 3, 2018
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Net sales
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$3,566
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|
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$3,648
|
|
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$10,694
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$11,097
|
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Credit card revenues, net
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106
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100
|
|
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293
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|
|
280
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||||
Total revenues
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3,672
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3,748
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10,987
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11,377
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Cost of sales and related buying and occupancy costs
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(2,344
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)
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(2,435
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)
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(7,049
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)
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(7,311
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)
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Selling, general and administrative expenses
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(1,135
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)
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(1,208
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)
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(3,453
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)
|
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(3,562
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)
|
||||
Earnings before interest and income taxes
|
193
|
|
|
105
|
|
|
485
|
|
|
504
|
|
||||
Interest expense, net
|
(20
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)
|
|
(25
|
)
|
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(66
|
)
|
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(81
|
)
|
||||
Earnings before income taxes
|
173
|
|
|
80
|
|
|
419
|
|
|
423
|
|
||||
Income tax expense
|
(47
|
)
|
|
(13
|
)
|
|
(115
|
)
|
|
(107
|
)
|
||||
Net earnings
|
|
$126
|
|
|
|
$67
|
|
|
|
$304
|
|
|
|
$316
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
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||||||||
Basic
|
|
$0.81
|
|
|
|
$0.40
|
|
|
|
$1.96
|
|
|
|
$1.88
|
|
Diluted
|
|
$0.81
|
|
|
|
$0.39
|
|
|
|
$1.95
|
|
|
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$1.85
|
|
|
|
|
|
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|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
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||||||||
Basic
|
155.2
|
|
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168.8
|
|
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155.1
|
|
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168.1
|
|
||||
Diluted
|
155.8
|
|
|
172.4
|
|
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155.9
|
|
|
171.0
|
|
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Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Net earnings
|
|
$126
|
|
|
|
$67
|
|
|
|
$304
|
|
|
|
$316
|
|
Foreign currency translation adjustment
|
2
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(18
|
)
|
||||
Post retirement plan adjustments, net of tax
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
||||
Comprehensive net earnings
|
|
$128
|
|
|
|
$65
|
|
|
|
$303
|
|
|
|
$301
|
|
|
November 2, 2019
|
|
|
February 2, 2019
|
|
|
November 3, 2018
|
|
|||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$487
|
|
|
|
$957
|
|
|
|
$1,127
|
|
Accounts receivable, net
|
234
|
|
|
148
|
|
|
190
|
|
|||
Merchandise inventories
|
2,542
|
|
|
1,978
|
|
|
2,614
|
|
|||
Prepaid expenses and other
|
310
|
|
|
291
|
|
|
366
|
|
|||
Total current assets
|
3,573
|
|
|
3,374
|
|
|
4,297
|
|
|||
|
|
|
|
|
|
||||||
Land, property and equipment (net of accumulated depreciation of $6,884, $6,647 and $6,517)
|
4,146
|
|
|
3,921
|
|
|
3,858
|
|
|||
Operating lease right-of-use assets
|
1,784
|
|
|
—
|
|
|
—
|
|
|||
Goodwill
|
249
|
|
|
249
|
|
|
249
|
|
|||
Other assets
|
323
|
|
|
342
|
|
|
305
|
|
|||
Total assets
|
|
$10,075
|
|
|
|
$7,886
|
|
|
|
$8,709
|
|
|
|
|
|
|
|
||||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
|
$2,148
|
|
|
|
$1,469
|
|
|
|
$2,106
|
|
Accrued salaries, wages and related benefits
|
470
|
|
|
580
|
|
|
526
|
|
|||
Current portion of operating lease liabilities
|
238
|
|
|
—
|
|
|
—
|
|
|||
Other current liabilities
|
1,125
|
|
|
1,324
|
|
|
1,202
|
|
|||
Current portion of long-term debt
|
—
|
|
|
8
|
|
|
8
|
|
|||
Total current liabilities
|
3,981
|
|
|
3,381
|
|
|
3,842
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt, net
|
2,679
|
|
|
2,677
|
|
|
2,678
|
|
|||
Deferred property incentives, net
|
4
|
|
|
457
|
|
|
465
|
|
|||
Non-current operating lease liabilities
|
1,895
|
|
|
—
|
|
|
—
|
|
|||
Other liabilities
|
665
|
|
|
498
|
|
|
521
|
|
|||
|
|
|
|
|
|
||||||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common stock, no par value: 1,000 shares authorized; 155.2, 157.6 and 168.9 shares issued and outstanding
|
3,106
|
|
|
3,048
|
|
|
3,029
|
|
|||
Accumulated deficit
|
(2,217
|
)
|
|
(2,138
|
)
|
|
(1,777
|
)
|
|||
Accumulated other comprehensive loss
|
(38
|
)
|
|
(37
|
)
|
|
(49
|
)
|
|||
Total shareholders’ equity
|
851
|
|
|
873
|
|
|
1,203
|
|
|||
Total liabilities and shareholders’ equity
|
|
$10,075
|
|
|
|
$7,886
|
|
|
|
$8,709
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Common stock
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
|
$3,084
|
|
|
|
$2,899
|
|
|
|
$3,048
|
|
|
|
$2,816
|
|
Issuance of common stock under stock compensation plans
|
8
|
|
|
111
|
|
|
19
|
|
|
160
|
|
||||
Stock-based compensation
|
14
|
|
|
19
|
|
|
39
|
|
|
53
|
|
||||
Balance, end of period
|
|
$3,106
|
|
|
|
$3,029
|
|
|
|
$3,106
|
|
|
|
$3,029
|
|
|
|
|
|
|
|
|
|
||||||||
Accumulated deficit
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
|
($2,286
|
)
|
|
|
($1,712
|
)
|
|
|
($2,138
|
)
|
|
|
($1,810
|
)
|
Cumulative effect of adopted accounting standards
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
60
|
|
||||
Net earnings
|
126
|
|
|
67
|
|
|
304
|
|
|
316
|
|
||||
Dividends
|
(57
|
)
|
|
(62
|
)
|
|
(172
|
)
|
|
(186
|
)
|
||||
Repurchase of common stock
|
—
|
|
|
(70
|
)
|
|
(186
|
)
|
|
(157
|
)
|
||||
Balance, end of period
|
|
($2,217
|
)
|
|
|
($1,777
|
)
|
|
|
($2,217
|
)
|
|
|
($1,777
|
)
|
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive loss
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
|
($39
|
)
|
|
|
($47
|
)
|
|
|
($37
|
)
|
|
|
($29
|
)
|
Cumulative effect of adopted accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Other comprehensive income (loss)
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(15
|
)
|
||||
Balance, end of period
|
|
($38
|
)
|
|
|
($49
|
)
|
|
|
($38
|
)
|
|
|
($49
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$851
|
|
|
|
$1,203
|
|
|
|
$851
|
|
|
|
$1,203
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per share
|
|
$0.37
|
|
|
|
$0.37
|
|
|
|
$1.11
|
|
|
|
$1.11
|
|
|
Nine Months Ended
|
||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||
Operating Activities
|
|
|
|
||||
Net earnings
|
|
$304
|
|
|
|
$316
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expenses and other, net
|
482
|
|
|
498
|
|
||
Amortization of deferred property incentives
|
—
|
|
|
(49
|
)
|
||
Right-of-use asset amortization
|
132
|
|
|
—
|
|
||
Deferred income taxes, net
|
25
|
|
|
11
|
|
||
Stock-based compensation expense
|
55
|
|
|
72
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
31
|
|
|
(45
|
)
|
||
Merchandise inventories
|
(515
|
)
|
|
(526
|
)
|
||
Prepaid expenses and other assets
|
(68
|
)
|
|
(78
|
)
|
||
Accounts payable
|
579
|
|
|
554
|
|
||
Accrued salaries, wages and related benefits
|
(109
|
)
|
|
(50
|
)
|
||
Other current liabilities
|
(175
|
)
|
|
(102
|
)
|
||
Deferred property incentives
|
4
|
|
|
37
|
|
||
Lease liabilities
|
(191
|
)
|
|
—
|
|
||
Other liabilities
|
15
|
|
|
4
|
|
||
Net cash provided by operating activities
|
569
|
|
|
642
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(741
|
)
|
|
(429
|
)
|
||
Other, net
|
24
|
|
|
(19
|
)
|
||
Net cash used in investing activities
|
(717
|
)
|
|
(448
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Principal payments on long-term borrowings
|
—
|
|
|
(54
|
)
|
||
Increase in cash book overdrafts
|
58
|
|
|
34
|
|
||
Cash dividends paid
|
(172
|
)
|
|
(186
|
)
|
||
Payments for repurchase of common stock
|
(210
|
)
|
|
(155
|
)
|
||
Proceeds from issuances under stock compensation plans
|
19
|
|
|
160
|
|
||
Tax withholding on share-based awards
|
(17
|
)
|
|
(19
|
)
|
||
Other, net
|
—
|
|
|
(28
|
)
|
||
Net cash used in financing activities
|
(322
|
)
|
|
(248
|
)
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(470
|
)
|
|
(54
|
)
|
||
Cash and cash equivalents at beginning of period
|
957
|
|
|
1,181
|
|
||
Cash and cash equivalents at end of period
|
|
$487
|
|
|
|
$1,127
|
|
|
|
|
|
||||
Supplemental Cash Flow Information
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Income taxes, net
|
|
$162
|
|
|
|
$278
|
|
Interest, net of capitalized interest
|
76
|
|
|
95
|
|
•
|
Increase in total assets and total liabilities of $1,849 primarily due to recognizing ROU assets and operating lease liabilities for most leases previously classified as operating leases.
|
•
|
Reclassification of deferred property incentives, net of $568 to ROU assets on the Condensed Consolidated Balance Sheet.
|
•
|
Reclassification of deferred property incentives, net of $339 from ROU assets to other current liabilities and other liabilities on the Condensed Consolidated Balance Sheet for property incentives that exceed the associated ROU asset. Property incentives that exceed the associated ROU asset are primarily due to leases with low fixed lease costs that may also have variable lease costs that are excluded from the ROU asset.
|
•
|
Increase in beginning accumulated deficit of $25 primarily due to the net impact of removing a building and associated financial obligation from land, property and equipment and long-term debt, net on the Condensed Consolidated Balance Sheet related to a failed sale-leaseback transaction.
|
•
|
Upon adoption, we did not reassess our prior conclusions about lease identification, lease classification or initial direct costs, and we did not use hindsight for leases existing at adoption date.
|
•
|
We do not record leases with an initial term of 12 months or less on the balance sheet but continue to expense them on a straight-line basis over the lease term.
|
•
|
We combine lease and non-lease components.
|
|
November 2, 2019
|
||||||
|
Quarter Ended
|
|
|
Nine Months Ended
|
|
||
Operating Lease Cost
|
|
$70
|
|
|
|
$209
|
|
Variable lease cost1
|
10
|
|
|
34
|
|
||
Sublease income
|
(4
|
)
|
|
(8
|
)
|
||
Total lease cost
|
|
$76
|
|
|
|
$235
|
|
Fiscal year
|
Operating Leases
|
|
|
2019 (excluding the nine months ended November 2, 2019)
|
|
$64
|
|
2020
|
358
|
|
|
2021
|
348
|
|
|
2022
|
323
|
|
|
2023
|
295
|
|
|
2024
|
248
|
|
|
Thereafter
|
1,086
|
|
|
Total lease payments
|
2,722
|
|
|
|
|
||
Less: amount representing interest
|
(589
|
)
|
|
Present value of net lease payments1
|
|
$2,133
|
|
|
Nine Months Ended November 2, 2019
|
|
|
Cash paid related to operating lease liabilities
|
|
$267
|
|
Operating lease interest
|
76
|
|
|
Operating lease liabilities arising from obtaining ROU assets
|
2,326
|
|
|
Cash received from developer reimbursements
|
61
|
|
|
Amortization of developer reimbursements
|
56
|
|
|
|
|
||
|
November 2, 2019
|
|
|
Weighted-average remaining lease term
|
10 years
|
|
|
Weighted-average discount rate
|
4.7
|
%
|
|
November 3, 2018
|
||||||
|
Quarter Ended
|
|
|
Nine Months Ended
|
|
||
Minimum rent
|
|
$78
|
|
|
|
$237
|
|
Percentage rent
|
2
|
|
|
7
|
|
||
Property incentives
|
(20
|
)
|
|
(60
|
)
|
||
Total rent expense
|
|
$60
|
|
|
|
$184
|
|
Fiscal year
|
Operating Leases
|
|
|
2019
|
|
$322
|
|
2020
|
313
|
|
|
2021
|
294
|
|
|
2022
|
271
|
|
|
2023
|
249
|
|
|
Thereafter
|
1,160
|
|
|
Total minimum lease payments
|
|
$2,609
|
|
|
Contract Liabilities
|
|
|
Opening balance as of February 4, 2018
|
|
$498
|
|
Balance as of May 5, 2018
|
460
|
|
|
Balance as of August 4, 2018
|
445
|
|
|
Balance as of November 3, 2018
|
450
|
|
|
|
|
||
Balance as of February 2, 2019
|
548
|
|
|
Balance as of May 4, 2019
|
504
|
|
|
Balance as of August 3, 2019
|
488
|
|
|
Balance as of November 2, 2019
|
483
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Full-Price
|
|
$2,270
|
|
|
|
$2,367
|
|
|
|
$6,928
|
|
|
|
$7,314
|
|
Off-Price
|
1,296
|
|
|
1,281
|
|
|
3,766
|
|
|
3,783
|
|
||||
Total net sales
|
|
$3,566
|
|
|
|
$3,648
|
|
|
|
$10,694
|
|
|
|
$11,097
|
|
|
|
|
|
|
|
|
|
||||||||
Digital sales as a % of total net sales1
|
34
|
%
|
|
31
|
%
|
|
32
|
%
|
|
29
|
%
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
Women’s Apparel
|
32
|
%
|
|
32
|
%
|
|
33
|
%
|
|
33
|
%
|
Shoes
|
25
|
%
|
|
24
|
%
|
|
24
|
%
|
|
24
|
%
|
Men’s Apparel
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
Women’s Accessories
|
10
|
%
|
|
10
|
%
|
|
11
|
%
|
|
10
|
%
|
Beauty
|
10
|
%
|
|
11
|
%
|
|
10
|
%
|
|
11
|
%
|
Kids’ Apparel
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
Other
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
Total net sales
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Retail segment EBIT1
|
|
$257
|
|
|
|
$162
|
|
|
|
$671
|
|
|
|
$674
|
|
Corporate/Other loss before interest and income taxes1
|
(64
|
)
|
|
(57
|
)
|
|
(186
|
)
|
|
(170
|
)
|
||||
Interest expense, net
|
(20
|
)
|
|
(25
|
)
|
|
(66
|
)
|
|
(81
|
)
|
||||
Earnings before income taxes
|
|
$173
|
|
|
|
$80
|
|
|
|
$419
|
|
|
|
$423
|
|
|
November 2, 2019
|
|
|
February 2, 2019
|
|
|
November 3, 2018
|
|
|||
Long-term debt, net of unamortized discount:
|
|
|
|
|
|
||||||
Senior notes, 4.75%, due May 2020
|
|
$500
|
|
|
|
$500
|
|
|
|
$500
|
|
Senior notes, 4.00%, due October 2021
|
500
|
|
|
500
|
|
|
500
|
|
|||
Senior notes, 4.00%, due March 2027
|
349
|
|
|
349
|
|
|
349
|
|
|||
Senior debentures, 6.95%, due March 2028
|
300
|
|
|
300
|
|
|
300
|
|
|||
Senior notes, 7.00%, due January 2038
|
147
|
|
|
146
|
|
|
146
|
|
|||
Senior notes, 5.00%, due January 2044
|
897
|
|
|
895
|
|
|
894
|
|
|||
Other1
|
(14
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|||
Total long-term debt
|
2,679
|
|
|
2,685
|
|
|
2,686
|
|
|||
|
|
|
|
|
|
||||||
Less: current portion
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||
Total due beyond one year
|
|
$2,679
|
|
|
|
$2,677
|
|
|
|
$2,678
|
|
|
November 2, 2019
|
|
|
February 2, 2019
|
|
|
November 3, 2018
|
|
|||
Carrying value of long-term debt
|
|
$2,679
|
|
|
|
$2,685
|
|
|
|
$2,686
|
|
Fair value of long-term debt
|
2,831
|
|
|
2,692
|
|
|
2,700
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|||
2018 Program
|
|
|
|
|
|
|
|
|||||||
Shares of common stock repurchased
|
—
|
|
|
1.1
|
|
|
4.1
|
|
|
2.9
|
|
|||
Aggregate amount of common stock repurchased
|
—
|
|
|
|
$70
|
|
|
|
$186
|
|
|
|
$157
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
RSUs
|
|
$11
|
|
|
|
$17
|
|
|
|
$39
|
|
|
|
$57
|
|
Stock options
|
2
|
|
|
3
|
|
|
9
|
|
|
9
|
|
||||
Other1
|
2
|
|
|
1
|
|
|
7
|
|
|
6
|
|
||||
Total stock-based compensation expense, before income tax benefit
|
15
|
|
|
21
|
|
|
55
|
|
|
72
|
|
||||
Income tax benefit
|
(4
|
)
|
|
(5
|
)
|
|
(14
|
)
|
|
(18
|
)
|
||||
Total stock-based compensation expense, net of income tax benefit
|
|
$11
|
|
|
|
$16
|
|
|
|
$41
|
|
|
|
$54
|
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
November 3, 2018
|
||||||||||
|
Granted
|
|
|
Weighted-average grant-date fair value per unit
|
|
|
Granted
|
|
|
Weighted-average grant-date fair value per unit
|
|
||
RSUs
|
1.2
|
|
|
|
$40
|
|
|
2.2
|
|
|
|
$49
|
|
Stock options
|
1.0
|
|
|
|
$15
|
|
|
—
|
|
|
—
|
|
|
PSUs
|
0.3
|
|
|
|
$42
|
|
|
—
|
|
|
—
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Net earnings
|
|
$126
|
|
|
|
$67
|
|
|
|
$304
|
|
|
|
$316
|
|
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
155.2
|
|
|
168.8
|
|
|
155.1
|
|
|
168.1
|
|
||||
Dilutive effect of common stock equivalents
|
0.6
|
|
|
3.6
|
|
|
0.8
|
|
|
2.9
|
|
||||
Diluted shares
|
155.8
|
|
|
172.4
|
|
|
155.9
|
|
|
171.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per basic share
|
|
$0.81
|
|
|
|
$0.40
|
|
|
|
$1.96
|
|
|
|
$1.88
|
|
Earnings per diluted share
|
|
$0.81
|
|
|
|
$0.39
|
|
|
|
$1.95
|
|
|
|
$1.85
|
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive common stock equivalents
|
10.6
|
|
|
1.8
|
|
|
10.5
|
|
|
5.5
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Net sales by business:
|
|
|
|
|
|
|
|
||||||||
Full-Price
|
|
$2,270
|
|
|
|
$2,367
|
|
|
|
$6,928
|
|
|
|
$7,314
|
|
Off-Price
|
1,296
|
|
|
1,281
|
|
|
3,766
|
|
|
3,783
|
|
||||
Total net sales
|
|
$3,566
|
|
|
|
$3,648
|
|
|
|
$10,694
|
|
|
|
$11,097
|
|
|
|
|
|
|
|
|
|
||||||||
Net sales increase (decrease) by business:
|
|
|
|
|
|
|
|
||||||||
Full-Price
|
(4.1
|
%)
|
|
0.4
|
%
|
|
(5.3
|
%)
|
|
1.9
|
%
|
||||
Off-Price
|
1.2
|
%
|
|
5.8
|
%
|
|
(0.4
|
%)
|
|
3.4
|
%
|
||||
Total Company
|
(2.2
|
%)
|
|
2.3
|
%
|
|
(3.6
|
%)
|
|
2.4
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Digital sales as % of total net sales1
|
34
|
%
|
|
31
|
%
|
|
32
|
%
|
|
29
|
%
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Gross profit
|
|
$1,222
|
|
|
|
$1,213
|
|
|
|
$3,645
|
|
|
|
$3,786
|
|
Gross profit as a % of net sales
|
34.3
|
%
|
|
33.3
|
%
|
|
34.1
|
%
|
|
34.1
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||||
Inventory turnover rate
|
|
|
|
|
4.47
|
|
|
4.56
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
SG&A expenses
|
|
$1,135
|
|
|
|
$1,208
|
|
|
|
$3,453
|
|
|
|
$3,562
|
|
SG&A expenses as a % of net sales
|
31.8
|
%
|
|
33.1
|
%
|
|
32.3
|
%
|
|
32.1
|
%
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
EBIT
|
|
$193
|
|
|
|
$105
|
|
|
|
$485
|
|
|
|
$504
|
|
EBIT as a % of sales
|
5.4
|
%
|
|
2.9
|
%
|
|
4.5
|
%
|
|
4.5
|
%
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Income tax expense
|
|
$47
|
|
|
|
$13
|
|
|
|
$115
|
|
|
|
$107
|
|
Effective tax rate
|
26.9
|
%
|
|
16.4
|
%
|
|
27.6
|
%
|
|
25.3
|
%
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||||
Basic
|
|
$0.81
|
|
|
|
$0.40
|
|
|
|
$1.96
|
|
|
|
$1.88
|
|
Diluted
|
|
$0.81
|
|
|
|
$0.39
|
|
|
|
$1.95
|
|
|
|
$1.85
|
|
|
Prior Outlook
|
Current Outlook
|
Net sales
|
Approximately 2 percent decrease
|
Approximately 2 percent decrease
|
Credit card revenues, net
|
Low to mid single-digit growth
|
Mid single-digit growth
|
EBIT
|
$805 to $855 million
|
$815 to $855 million
|
EBIT margin
|
5.3 to 5.6 percent
|
5.4 to 5.6 percent
|
Earnings per diluted share (excluding the impact of any potential future share repurchases)
|
$3.25 to $3.50
|
$3.30 to $3.50
|
|
Four Quarters Ended
|
||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||
Net earnings
|
|
$551
|
|
|
|
$467
|
|
Add: income tax expense
|
178
|
|
|
276
|
|
||
Add: interest expense
|
101
|
|
|
124
|
|
||
Earnings before interest and income tax expense
|
830
|
|
|
867
|
|
||
|
|
|
|
||||
Add: operating lease interest1
|
76
|
|
|
—
|
|
||
Add: rent expense, net
|
66
|
|
|
251
|
|
||
Less: estimated depreciation on capitalized operating leases2
|
(35
|
)
|
|
(134
|
)
|
||
Adjusted net operating profit
|
937
|
|
|
984
|
|
||
|
|
|
|
||||
Less: estimated income tax expense
|
(228
|
)
|
|
(365
|
)
|
||
Adjusted net operating profit after tax
|
|
$709
|
|
|
|
$619
|
|
|
|
|
|
||||
Average total assets
|
|
$9,403
|
|
|
|
$8,269
|
|
Less: average non-interest-bearing current liabilities
|
(3,563
|
)
|
|
(3,429
|
)
|
||
Less: average deferred property incentives in excess of ROU assets3
|
(232
|
)
|
|
—
|
|
||
Add: average estimated asset base of capitalized operating leases2
|
502
|
|
|
1,994
|
|
||
Less: average deferred property incentives and deferred rent liability
|
(150
|
)
|
|
(625
|
)
|
||
Average invested capital
|
|
$5,960
|
|
|
|
$6,209
|
|
|
|
|
|
||||
Return on assets4
|
5.9
|
%
|
|
5.6
|
%
|
||
Adjusted ROIC4
|
11.9
|
%
|
|
10.0
|
%
|
|
Nine Months Ended
|
||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||
Net cash provided by operating activities
|
|
$569
|
|
|
|
$642
|
|
Net cash used in investing activities
|
(717
|
)
|
|
(448
|
)
|
||
Net cash used in financing activities
|
(322
|
)
|
|
(248
|
)
|
|
Nine Months Ended
|
||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||
Net cash provided by operating activities
|
|
$569
|
|
|
|
$642
|
|
Less: capital expenditures
|
(741
|
)
|
|
(429
|
)
|
||
Add: change in cash book overdrafts
|
58
|
|
|
34
|
|
||
Free Cash Flow
|
|
($114
|
)
|
|
|
$247
|
|
|
Nine Months Ended
|
||||||
|
November 2, 2019
|
|
|
November 3, 2018
|
|
||
Net earnings
|
|
$304
|
|
|
|
$316
|
|
Add: income tax expense
|
115
|
|
|
107
|
|
||
Add: interest expense, net
|
66
|
|
|
81
|
|
||
Earnings before interest and income taxes
|
485
|
|
|
504
|
|
||
|
|
|
|
||||
Add: depreciation and amortization expenses
|
486
|
|
|
498
|
|
||
Less: amortization of developer reimbursements
|
(56
|
)
|
|
(60
|
)
|
||
Adjusted EBITDA
|
|
$915
|
|
|
|
$942
|
|
|
Credit Ratings
|
|
Outlook
|
Moody’s
|
Baa2
|
|
Stable
|
Standard & Poor’s
|
BBB
|
|
Stable
|
|
20191
|
|
|
20181
|
|
||
Debt
|
|
$2,679
|
|
|
|
$2,686
|
|
Add: operating lease liabilities
|
2,133
|
|
|
—
|
|
||
Add: estimated capitalized operating lease liability2
|
—
|
|
|
2,011
|
|
||
Adjusted Debt
|
|
$4,812
|
|
|
|
$4,697
|
|
|
|
|
|
||||
Net earnings
|
|
$551
|
|
|
|
$467
|
|
Add: income tax expense
|
178
|
|
|
276
|
|
||
Add: interest expense, net
|
89
|
|
|
111
|
|
||
Earnings before interest and income taxes
|
818
|
|
|
854
|
|
||
|
|
|
|
||||
Add: depreciation and amortization expenses
|
656
|
|
|
686
|
|
||
Add: lease costs, net3
|
205
|
|
|
—
|
|
||
Add: rent expense, net
|
66
|
|
|
251
|
|
||
Adjusted EBITDAR
|
|
$1,745
|
|
|
|
$1,791
|
|
|
|
|
|
||||
Debt to Net Earnings4
|
4.9
|
|
|
5.8
|
|
||
Adjusted Debt to EBITDAR4
|
2.8
|
|
|
2.6
|
|
Exhibit
|
|
Method of Filing
|
||
|
|
Incorporated by reference from the Registrant’s Form 8-K filed on November 6, 2019, Exhibit 4.1
|
||
|
|
|
|
|
|
|
Filed herewith electronically
|
||
|
|
|
|
|
|
|
Filed herewith electronically
|
||
|
|
|
|
|
|
|
Filed herewith electronically
|
||
|
|
|
|
|
|
|
Furnished herewith electronically
|
||
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document
|
|
Filed herewith electronically
|
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
Filed herewith electronically
|
|
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith electronically
|
|
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
|
Filed herewith electronically
|
|
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith electronically
|
|
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith electronically
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File (Inline XBRL)
|
|
Filed herewith electronically
|
NORDSTROM, INC.
|
|
(Registrant)
|
|
|
|
/s/ Anne L. Bramman
|
|
Anne L. Bramman
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
|
|
Date:
|
December 4, 2019
|
1.
|
VESTING AND CONVERSION OF UNITS
|
2.
|
ACCEPTANCE OF UNITS AND TERMS
|
3.
|
NONTRANSFERABILITY OF UNITS
|
4.
|
SEPARATION OF EMPLOYMENT
|
(a)
|
If the Unit holder dies while employed by the Employer, a prorated number of Units represented by the Award shall immediately vest, based on the number of full months the Unit holder was employed during the term of this Award Agreement, as of the date of the Unit holder’s death and be delivered as Common Stock promptly thereafter. Shares shall be issued in the name of the person identified on the Unit holder’s beneficiary form, as designated by the Company. If no valid beneficiary form exists, then the Common Stock delivered pursuant to the preceding sentence shall be issued in the name of the person to whom the Unit holder’s rights under this Award Agreement have passed by will or the laws of descent and distribution. If the Units were granted less than one month prior to death, the Units shall be forfeited as of the date of death.
|
(b)
|
If the Unit holder is separated due to his or her disability, as defined in Section 22(e)(3) of the Code and the Unit holder provides Nordstrom Compensation department, or any successor department, with reasonable documentation of his or her disability, a prorated number of Units represented by this Award shall immediately vest, based on the number of full months the Unit holder was employed during the term of this Award Agreement, as of the date of such separation and be delivered as Common Stock promptly thereafter. If the Units were granted less than one month prior to separation due to the Unit holder’s disability, the Units shall be forfeited as of the date of separation.
|
(c)
|
Notwithstanding subparagraphs (a) and (b) of this section, a Unit holder shall immediately forfeit any unvested and unsettled Units represented by this Award and any shares of Common Stock or proceeds from the sale of such shares of Common Stock, and the post-separation proration of Units and settlement rights set forth above shall cease immediately, if: (i) he or she is terminated by the Company or any of its subsidiaries for: embezzlement, theft of funds, fraud, violation of rules, regulations or policies, or any intentional harmful act or acts; or (ii) he or she at any time during the term of this Award directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, shareholder, corporate officer, director or in any other capacity, with respect to the Company or any of its subsidiaries, engages or assists any third party in engaging in any competitive business, divulges any confidential or proprietary information to a third party who is not authorized to receive the confidential or proprietary information, or improperly uses any confidential or proprietary information.
|
5.
|
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
|
6.
|
NO DIVIDEND RIGHTS
|
7.
|
ADDITIONAL UNITS
|
8.
|
LEAVES OF ABSENCE
|
9.
|
TAX WITHHOLDING
|
10.
|
INDEPENDENT TAX ADVICE
|
11.
|
RIGHTS AS A SHAREHOLDER
|
12.
|
NO RETENTION RIGHTS
|
13.
|
CLAWBACK POLICY
|
14.
|
ENTIRE AGREEMENT
|
15.
|
CHOICE OF LAW
|
16.
|
SEVERABILITY
|
17.
|
CODE SECTION 409A
|
Date:
|
December 4, 2019
|
|
|
|
|
/s/ Erik B. Nordstrom
|
|
Erik B. Nordstrom
Co-President of Nordstrom, Inc.
|
Date:
|
December 4, 2019
|
|
|
|
|
/s/ Anne L. Bramman
|
|
Anne L. Bramman
Chief Financial Officer of Nordstrom, Inc.
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
December 4, 2019
|
|
|
|
|
/s/ Erik B. Nordstrom
|
|
Erik B. Nordstrom
|
|
Co-President of Nordstrom, Inc.
|
|
|
|
|
|
/s/ Anne L. Bramman
|
|
Anne L. Bramman
|
|
Chief Financial Officer of Nordstrom, Inc.
|