☑
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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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the impacts of the recent novel coronavirus (“COVID-19”) global pandemic and the significant civil unrest, looting and rioting in several urban centers on our business and results, which effects may include the exacerbation of any of the risks discussed below,
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•
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successful execution of our customer strategy to provide the best possible service, product and experience, both in stores and online,
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•
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timely and effective implementation and execution of our evolving business model, including:
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◦
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scaling our market strategy, which consists of the integration of our physical and digital assets, development of new supply chain capabilities and timely delivery of products,
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◦
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our merchandise strategy, including our ability to offer compelling assortments,
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◦
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enhancing our platforms and processes to allow for more flexible inventory management,
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•
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our ability to effectively allocate and scale our marketing strategies and resources between The Nordy Club, advertising and promotional campaigns,
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•
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our ability to respond to the evolving retail environment and our development of new market strategies and customer offerings, which result from new fashion trends, environmental considerations and 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, as well as, any potential store closures, 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, our ability to prevent or mitigate 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, third-party service providers and landlords
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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 top talent and 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 credit card revenue sharing program,
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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, fluctuations in the fair values of reporting units or of assets in the event projected financial results are not achieved within expected time frames or our strategic direction changes,
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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, and our ability to maintain an investment grade credit rating,
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•
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the actual timing, price, manner and amounts of future share repurchases, dividend payments, or share issuances, if any,
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•
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the length and severity of epidemics or pandemics, such as the COVID-19 pandemic, or other catastrophic events, and the related impact on customer behavior, store and online operations and supply chain functions, as well as our future consolidated financial position, results of operations and cash flows,
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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 Canada and countries where our third-party vendors operate,
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•
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weather conditions, natural disasters, epidemics, national security or other market and supply chain disruptions, or 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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2019 Plan
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2019 Equity Incentive Plan
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2019 Annual Report
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Annual Report on Form 10-K filed on March 20, 2020
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Adjusted EBITDA
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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, as defined by our Revolver covenant (a non-GAAP financial measure)
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Adjusted ROIC
|
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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CARES Act
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Coronavirus Aid, Relief and Economic Security Act
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CODM
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Chief operating decision maker
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COVID-19
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Novel coronavirus
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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 (Loss) before interest and income taxes
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EPS
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Earnings per share
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ESPP
|
Employee Stock Purchase Plan
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Exchange Act
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Securities Exchange Act of 1934, as amended
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Express Services
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Full-Price order pickups and returns offered at certain Nordstrom Rack stores
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FASB
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Financial Accounting Standards Board
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First quarter of 2020
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13 fiscal weeks ending May 2, 2020
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First quarter of 2019
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13 fiscal weeks ending May 4, 2019
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Fiscal year 2020
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52 fiscal weeks ending January 30, 2021
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Fiscal year 2019
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52 fiscal weeks ending February 1, 2020
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FLS
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Full-line stores
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Full-Price
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Nordstrom U.S. full-line stores, 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
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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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Lease Standard
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ASU No. 2016-02, Leases, and all related amendments (ASC 842)
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Leverage Ratio
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Ratio of adjusted debt to earnings before interest, income taxes, depreciation, amortization and rent (a non-GAAP financial measure)
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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 service hubs, which offer Full-Price order pickups, returns, alterations and other services
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Nordstrom NYC
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Our New York City flagship FLS, including the Men’s location
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The Nordy Club
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Our customer loyalty program enhanced 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, Nordstromrack.com/HauteLook 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 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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SERP
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Unfunded defined benefit Supplemental Executive Retirement Plan
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Secured Notes
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8.750% senior secured notes due May 2025
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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 primarily process and ship orders to our customers, distribution centers that primarily 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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May 2, 2020
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May 4, 2019
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Net sales
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$2,026
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$3,349
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Credit card revenues, net
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93
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94
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Total revenues
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2,119
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3,443
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Cost of sales and related buying and occupancy costs
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(1,810
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)
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(2,228
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)
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Selling, general and administrative expenses
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(1,122
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)
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(1,138
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)
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(Loss) earnings before interest and income taxes
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(813
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)
|
|
77
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|
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Interest expense, net
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(34
|
)
|
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(24
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)
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(Loss) earnings before income taxes
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(847
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)
|
|
53
|
|
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Income tax benefit (expense)
|
326
|
|
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(16
|
)
|
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Net (loss) earnings
|
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($521
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)
|
|
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$37
|
|
|
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(Loss) earnings per share:
|
|
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Basic
|
|
($3.33
|
)
|
|
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$0.24
|
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Diluted
|
|
($3.33
|
)
|
|
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$0.23
|
|
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||||
Weighted-average shares outstanding:
|
|
|
|
||||
Basic
|
156.4
|
|
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155.0
|
|
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Diluted
|
156.4
|
|
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156.2
|
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Quarter Ended
|
||||||
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May 2, 2020
|
|
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May 4, 2019
|
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Net (loss) earnings
|
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($521
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)
|
|
|
$37
|
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Foreign currency translation adjustment
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(24
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)
|
|
(9
|
)
|
||
Post retirement plan adjustments, net of tax
|
2
|
|
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—
|
|
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Comprehensive net (loss) earnings
|
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($543
|
)
|
|
|
$28
|
|
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May 2, 2020
|
|
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February 1, 2020
|
|
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May 4, 2019
|
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Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
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$1,355
|
|
|
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$853
|
|
|
|
$448
|
|
Accounts receivable, net
|
154
|
|
|
179
|
|
|
233
|
|
|||
Merchandise inventories
|
1,489
|
|
|
1,920
|
|
|
2,006
|
|
|||
Prepaid expenses and other
|
669
|
|
|
278
|
|
|
271
|
|
|||
Total current assets
|
3,667
|
|
|
3,230
|
|
|
2,958
|
|
|||
|
|
|
|
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|
||||||
Land, property and equipment (net of accumulated depreciation of $6,683, $6,995 and $6,678)
|
3,974
|
|
|
4,179
|
|
|
3,963
|
|
|||
Operating lease right-of-use assets
|
1,722
|
|
|
1,774
|
|
|
1,833
|
|
|||
Goodwill
|
249
|
|
|
249
|
|
|
249
|
|
|||
Other assets
|
357
|
|
|
305
|
|
|
335
|
|
|||
Total assets
|
|
$9,969
|
|
|
|
$9,737
|
|
|
|
$9,338
|
|
|
|
|
|
|
|
||||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Borrowings under revolving line of credit
|
|
$800
|
|
|
|
$—
|
|
|
|
$—
|
|
Accounts payable
|
1,125
|
|
|
1,576
|
|
|
1,619
|
|
|||
Accrued salaries, wages and related benefits
|
280
|
|
|
510
|
|
|
315
|
|
|||
Current portion of operating lease liabilities
|
243
|
|
|
244
|
|
|
237
|
|
|||
Other current liabilities
|
1,351
|
|
|
1,190
|
|
|
1,222
|
|
|||
Current portion of long-term debt
|
—
|
|
|
—
|
|
|
499
|
|
|||
Total current liabilities
|
3,799
|
|
|
3,520
|
|
|
3,892
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt, net
|
3,264
|
|
|
2,676
|
|
|
2,177
|
|
|||
Non-current operating lease liabilities
|
1,836
|
|
|
1,875
|
|
|
1,951
|
|
|||
Other liabilities
|
673
|
|
|
687
|
|
|
667
|
|
|||
|
|
|
|
|
|
||||||
Commitments and contingencies (Note 5)
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common stock, no par value: 1,000 shares authorized; 157.0, 155.6 and 154.6 shares issued and outstanding
|
3,148
|
|
|
3,129
|
|
|
3,067
|
|
|||
Accumulated deficit
|
(2,661
|
)
|
|
(2,082
|
)
|
|
(2,370
|
)
|
|||
Accumulated other comprehensive loss
|
(90
|
)
|
|
(68
|
)
|
|
(46
|
)
|
|||
Total shareholders’ equity
|
397
|
|
|
979
|
|
|
651
|
|
|||
Total liabilities and shareholders’ equity
|
|
$9,969
|
|
|
|
$9,737
|
|
|
|
$9,338
|
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
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Common stock
|
|
|
|
||||
Balance, beginning of period
|
|
$3,129
|
|
|
|
$3,048
|
|
Issuance of common stock under stock compensation plans
|
11
|
|
|
10
|
|
||
Stock-based compensation
|
8
|
|
|
9
|
|
||
Balance, end of period
|
|
$3,148
|
|
|
|
$3,067
|
|
|
|
|
|
||||
Accumulated deficit
|
|
|
|
||||
Balance, beginning of period
|
|
($2,082
|
)
|
|
|
($2,138
|
)
|
Cumulative effect of adopted accounting standards
|
—
|
|
|
(25
|
)
|
||
Net (loss) earnings
|
(521
|
)
|
|
37
|
|
||
Dividends
|
(58
|
)
|
|
(58
|
)
|
||
Repurchase of common stock
|
—
|
|
|
(186
|
)
|
||
Balance, end of period
|
|
($2,661
|
)
|
|
|
($2,370
|
)
|
|
|
|
|
||||
Accumulated other comprehensive loss
|
|
|
|
||||
Balance, beginning of period
|
|
($68
|
)
|
|
|
($37
|
)
|
Other comprehensive loss
|
(22
|
)
|
|
(9
|
)
|
||
Balance, end of period
|
|
($90
|
)
|
|
|
($46
|
)
|
|
|
|
|
||||
Total
|
|
$397
|
|
|
|
$651
|
|
|
|
|
|
||||
Dividends per share
|
|
$0.37
|
|
|
|
$0.37
|
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Operating Activities
|
|
|
|
||||
Net (loss) earnings
|
|
($521
|
)
|
|
|
$37
|
|
Adjustments to reconcile net (loss) earnings to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization expenses and other, net
|
178
|
|
|
165
|
|
||
Asset impairment
|
117
|
|
|
—
|
|
||
Right-of-use asset amortization
|
44
|
|
|
43
|
|
||
Deferred income taxes, net
|
(54
|
)
|
|
18
|
|
||
Stock-based compensation expense
|
13
|
|
|
20
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
25
|
|
|
(2
|
)
|
||
Merchandise inventories
|
228
|
|
|
(89
|
)
|
||
Prepaid expenses and other assets
|
(393
|
)
|
|
(12
|
)
|
||
Accounts payable
|
(292
|
)
|
|
181
|
|
||
Accrued salaries, wages and related benefits
|
(227
|
)
|
|
(266
|
)
|
||
Other current liabilities
|
167
|
|
|
(74
|
)
|
||
Lease liabilities
|
(65
|
)
|
|
(59
|
)
|
||
Other liabilities
|
2
|
|
|
7
|
|
||
Net cash used in operating activities
|
(778
|
)
|
|
(31
|
)
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(131
|
)
|
|
(249
|
)
|
||
Other, net
|
5
|
|
|
1
|
|
||
Net cash used in investing activities
|
(126
|
)
|
|
(248
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Proceeds from revolving line of credit
|
800
|
|
|
—
|
|
||
Proceeds from long-term borrowings
|
600
|
|
|
—
|
|
||
Increase in cash book overdrafts
|
83
|
|
|
40
|
|
||
Cash dividends paid
|
(58
|
)
|
|
(58
|
)
|
||
Payments for repurchase of common stock
|
—
|
|
|
(210
|
)
|
||
Proceeds from issuances under stock compensation plans
|
11
|
|
|
10
|
|
||
Tax withholding on share-based awards
|
(8
|
)
|
|
(12
|
)
|
||
Other, net
|
(11
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
1,417
|
|
|
(230
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(11
|
)
|
|
—
|
|
||
Net increase (decrease) in cash and cash equivalents
|
502
|
|
|
(509
|
)
|
||
Cash and cash equivalents at beginning of period
|
853
|
|
|
957
|
|
||
Cash and cash equivalents at end of period
|
|
$1,355
|
|
|
|
$448
|
|
|
|
|
|
||||
Supplemental Cash Flow Information
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Income taxes, net
|
|
$—
|
|
|
|
$8
|
|
Interest, net of capitalized interest
|
34
|
|
|
31
|
|
|
May 2, 2020
|
|
|
Long-lived asset impairment1
|
|
$94
|
|
Operating lease ROU asset impairment1
|
23
|
|
|
Total asset impairment
|
|
$117
|
|
|
Contract Liabilities
|
|
|
Balance as of February 2, 2019
|
|
$548
|
|
Balance as of May 4, 2019
|
504
|
|
|
|
|
||
Balance as of February 1, 2020
|
576
|
|
|
Balance as of May 2, 2020
|
489
|
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Full-Price
|
|
$1,357
|
|
|
|
$2,127
|
|
Off-Price
|
669
|
|
|
1,222
|
|
||
Total net sales
|
|
$2,026
|
|
|
|
$3,349
|
|
|
|
|
|
||||
Digital sales as a % of total net sales
|
54
|
%
|
|
31
|
%
|
|
Quarter Ended
|
||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
Women’s Apparel
|
33
|
%
|
|
33
|
%
|
Shoes
|
24
|
%
|
|
24
|
%
|
Men’s Apparel
|
12
|
%
|
|
15
|
%
|
Women’s Accessories
|
12
|
%
|
|
11
|
%
|
Beauty
|
12
|
%
|
|
10
|
%
|
Kids’ Apparel
|
4
|
%
|
|
4
|
%
|
Other
|
3
|
%
|
|
3
|
%
|
Total net sales
|
100
|
%
|
|
100
|
%
|
|
May 2, 2020
|
|
|
February 1, 2020
|
|
|
May 4, 2019
|
|
|||
Carrying value of long-term debt
|
|
$3,264
|
|
|
|
$2,676
|
|
|
|
$2,676
|
|
Fair value of long-term debt
|
2,804
|
|
|
2,905
|
|
|
2,741
|
|
|
Quarter Ended
|
|
|
|
May 4, 2019
|
|
|
2018 Program
|
|
||
Shares of common stock repurchased
|
4.1
|
|
|
Aggregate amount of common stock repurchased
|
|
$186
|
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
RSUs
|
|
$13
|
|
|
|
$14
|
|
Stock options
|
2
|
|
|
4
|
|
||
Other1
|
(2
|
)
|
|
2
|
|
||
Total stock-based compensation expense, before income tax benefit
|
13
|
|
|
20
|
|
||
Income tax benefit
|
(5
|
)
|
|
(5
|
)
|
||
Total stock-based compensation expense, net of income tax benefit
|
|
$8
|
|
|
|
$15
|
|
|
Quarter Ended
|
||||||||||||
|
May 2, 2020
|
|
May 4, 2019
|
||||||||||
|
Granted
|
|
|
Weighted-average grant-date fair value per unit
|
|
|
Granted
|
|
|
Weighted-average grant-date fair value per unit
|
|
||
RSUs
|
2.2
|
|
|
|
$23
|
|
|
1.1
|
|
|
|
$41
|
|
Stock options
|
0.3
|
|
|
|
$7
|
|
|
1.0
|
|
|
|
$15
|
|
PSUs
|
0.4
|
|
|
|
$24
|
|
|
0.3
|
|
|
|
$42
|
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Net (loss) earnings
|
|
($521
|
)
|
|
|
$37
|
|
|
|
|
|
||||
Basic shares
|
156.4
|
|
|
155.0
|
|
||
Dilutive effect of common stock equivalents
|
—
|
|
|
1.2
|
|
||
Diluted shares
|
156.4
|
|
|
156.2
|
|
||
|
|
|
|
||||
(Loss) earnings per basic share
|
|
($3.33
|
)
|
|
|
$0.24
|
|
(Loss) earnings per diluted share
|
|
($3.33
|
)
|
|
|
$0.23
|
|
|
|
|
|
||||
Anti-dilutive common stock equivalents
|
13.1
|
|
|
9.3
|
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Retail segment EBIT
|
|
($711
|
)
|
|
|
$142
|
|
Corporate/Other loss before interest and income taxes
|
(102
|
)
|
|
(65
|
)
|
||
Interest expense, net
|
(34
|
)
|
|
(24
|
)
|
||
(Loss) earnings before income taxes
|
|
($847
|
)
|
|
|
$53
|
|
•
|
Reduced inventory by more than 25% from last year, allowing us to bring in new product in June
|
•
|
Executing on our planned expense savings of $200 to $250 and further net cash savings of more than $500 in operating expenses, capital expenditures, and working capital
|
•
|
Suspended quarterly cash dividends beginning in the second quarter of 2020 and share repurchases
|
•
|
Drew down $800 on our Revolver and issued $600 in secured debt financing
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Net sales by business:
|
|
|
|
||||
Full-Price
|
|
$1,357
|
|
|
|
$2,127
|
|
Off-Price
|
669
|
|
|
1,222
|
|
||
Total net sales
|
|
$2,026
|
|
|
|
$3,349
|
|
|
|
|
|
||||
Net sales decrease by business:
|
|
|
|
||||
Full-Price
|
(36.2
|
%)
|
|
(5.1
|
%)
|
||
Off-Price
|
(45.2
|
%)
|
|
(0.6
|
%)
|
||
Total Company
|
(39.5
|
%)
|
|
(3.5
|
%)
|
||
|
|
|
|
||||
Digital sales as a % of total net sales
|
54
|
%
|
|
31
|
%
|
||
Digital sales increase
|
5
|
%
|
|
7
|
%
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Gross profit
|
|
$216
|
|
|
|
$1,121
|
|
Gross profit as a % of net sales
|
10.7
|
%
|
|
33.5
|
%
|
||
Inventory turnover rate
|
4.81
|
|
|
4.68
|
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
SG&A expenses
|
|
$1,122
|
|
|
|
$1,138
|
|
SG&A expenses as a % of net sales
|
55.4
|
%
|
|
34.0
|
%
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
EBIT
|
|
($813
|
)
|
|
|
$77
|
|
EBIT as a % of net sales
|
(40.1
|
%)
|
|
2.3
|
%
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Income tax (benefit) expense
|
|
($326
|
)
|
|
|
$16
|
|
Effective tax rate
|
38.4
|
%
|
|
31.0
|
%
|
|
Four Quarters Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Net (loss) earnings
|
|
($62
|
)
|
|
|
$513
|
|
Add: income tax (benefit) expense
|
(156
|
)
|
|
147
|
|
||
Add: interest expense
|
121
|
|
|
115
|
|
||
(Loss) earnings before interest and income tax expense
|
(97
|
)
|
|
775
|
|
||
|
|
|
|
||||
Add: operating lease interest1
|
102
|
|
|
23
|
|
||
Add: rent expense, net
|
—
|
|
|
189
|
|
||
Less: estimated depreciation on capitalized operating leases2
|
—
|
|
|
(101
|
)
|
||
Adjusted net operating profit
|
5
|
|
|
886
|
|
||
|
|
|
|
||||
Less: estimated income tax expense
|
(4
|
)
|
|
(198
|
)
|
||
Adjusted net operating profit after tax
|
|
$1
|
|
|
|
$688
|
|
|
|
|
|
||||
Average total assets
|
|
$9,811
|
|
|
|
$8,591
|
|
Add: average estimated asset base of capitalized operating leases2
|
—
|
|
|
1,508
|
|
||
Less: average deferred property incentives and deferred rent liability
|
—
|
|
|
(459
|
)
|
||
Less: average deferred property incentives in excess of ROU assets3
|
(303
|
)
|
|
(77
|
)
|
||
Less: average non-interest-bearing current liabilities
|
(3,324
|
)
|
|
(3,438
|
)
|
||
Average invested capital
|
|
$6,184
|
|
|
|
$6,125
|
|
|
|
|
|
||||
Return on assets4
|
(0.6
|
%)
|
|
6.0
|
%
|
||
Adjusted ROIC4
|
—
|
%
|
|
11.3
|
%
|
•
|
Drew down $800 on our Revolver and issued $600 in secured debt financing, ending the quarter with $1,355 in cash and cash equivalents on-hand
|
•
|
Suspended quarterly cash dividends beginning in the second quarter of 2020 and share repurchases
|
•
|
Planned expense savings of $200 to $250 and further net cash savings of more than $500 in operating expenses, capital expenditures and working capital in fiscal year 2020
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Net cash used in operating activities
|
|
($778
|
)
|
|
|
($31
|
)
|
Net cash used in investing activities
|
(126
|
)
|
|
(248
|
)
|
||
Net cash provided by (used in) financing activities
|
1,417
|
|
|
(230
|
)
|
|
Quarter Ended
|
||||||
Fiscal year
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Capital expenditures
|
|
$131
|
|
|
|
$249
|
|
Less: deferred property incentives1
|
(8
|
)
|
|
(29
|
)
|
||
Capital expenditures, net
|
|
$123
|
|
|
|
$220
|
|
|
|
|
|
||||
Capital expenditures % of net sales
|
6.4
|
%
|
|
7.4
|
%
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Net cash used in operating activities
|
|
($778
|
)
|
|
|
($31
|
)
|
Less: capital expenditures
|
(131
|
)
|
|
(249
|
)
|
||
Add: change in cash book overdrafts
|
83
|
|
|
40
|
|
||
Free Cash Flow
|
|
($826
|
)
|
|
|
($240
|
)
|
|
Quarter Ended
|
||||||
|
May 2, 2020
|
|
|
May 4, 2019
|
|
||
Net (loss) earnings
|
|
($521
|
)
|
|
|
$37
|
|
Add: income tax (benefit) expense
|
(326
|
)
|
|
16
|
|
||
Add: interest expense, net
|
34
|
|
|
24
|
|
||
(Loss) earnings before interest and income taxes
|
(813
|
)
|
|
77
|
|
||
|
|
|
|
||||
Add: depreciation and amortization expenses
|
176
|
|
|
163
|
|
||
Less: amortization of developer reimbursements
|
(19
|
)
|
|
(19
|
)
|
||
Add: asset impairments
|
117
|
|
|
—
|
|
||
Adjusted EBITDA
|
|
($539
|
)
|
|
|
$221
|
|
|
|
|
|
||||
Add: rent expense1
|
61
|
|
|
65
|
|
||
Add: other Revolver covenant adjustments2
|
2
|
|
|
3
|
|
||
Adjusted EBITDAR
|
|
($476
|
)
|
|
|
$289
|
|
|
Credit Ratings
|
|
Outlook
|
Moody’s
|
Baa3
|
|
Negative
|
Standard & Poor’s
|
BBB-
|
|
Negative
|
Exhibit
|
|
Method of Filing
|
||
|
|
Incorporated by reference from the Registrant’s Form 8-K filed on May 26, 2020, Exhibit 3.1
|
||
|
|
|
|
|
|
|
Filed herewith electronically
|
||
|
|
|
|
|
|
|
Incorporated by reference to Appendix B to the Registrant’s Form DEF 14A filed on April 7, 2020
|
||
|
|
|
|
|
|
|
Filed herewith electronically
|
||
|
|
|
|
|
|
|
Filed herewith electronically
|
||
|
|
|
|
|
|
|
Filed herewith electronically
|
||
|
|
|
|
|
|
|
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:
|
June 10, 2020
|
1
|
Definitions 1
|
Other Definitions 24
|
Rules of Construction 25
|
Inapplicability of the Trust Indenture Act 26
|
26
|
Form, Dating and Terms 26
|
Execution and Authentication 32
|
Registrar and Paying Agent 33
|
Paying Agent to Hold Money in Trust 33
|
Holder Lists 34
|
Transfer and Exchange 34
|
Mutilated, Destroyed, Lost or Stolen Notes 38
|
Outstanding Notes 39
|
Temporary Notes 39
|
Cancellation 40
|
Section 2.11.
|
Payment of Interest; Defaulted Interest 40
|
CUSIP and ISIN Numbers 41
|
41
|
Payment of Notes 41
|
Maintenance of Office or Agency 42
|
Stay, Extension and Usury Laws 42
|
Compliance Certificate 42
|
Limitation on Asset Dispositions 43
|
Limitation on Liens 45
|
Subsidiaries 45
|
Section 3.8.
|
Limitation on Restricted Payments 45
|
Limitation on PropCo 49
|
Suspension of Certain Covenants 49
|
Change of Control Triggering Event 50
|
Reports 51
|
Limitation on Guarantor Indebtedness 52
|
Statement by Officers as to Default 54
|
Master Leases and Other Leases. 54
|
Operation and Maintenance of Properties 55
|
Compliance with Laws and Insurance Requirements 55
|
Casualty or Condemnation. 55
|
Material Notices 56
|
Title to the Designated Real Estate Assets 56
|
Alterations 56
|
56
|
Consolidation, Merger or Sale of Assets 56
|
Successor Corporation Substituted 58
|
58
|
Notices and Opinions to Trustee 58
|
Selection of Notes to Be Redeemed or Purchased 58
|
Notice of Redemption 58
|
Effect of Notice of Redemption 60
|
Deposit of Redemption Price 60
|
Notes Redeemed in Part 60
|
Optional Redemption 61
|
Mandatory Redemption 62
|
62
|
Events of Default 62
|
Acceleration 64
|
Other Remedies 65
|
Section 6.4.
|
Waiver of Past or Existing Defaults 65
|
Control by Majority 65
|
Limitation on Suits 65
|
Rights of Holders to Receive Payment 66
|
Collection Suit by Trustee 66
|
Trustee May File Proofs of Claim 66
|
Priorities 67
|
Undertaking for Costs 67
|
67
|
Duties of Trustee 67
|
Rights of Trustee 69
|
Individual Rights of Trustee 70
|
Trustee’s Disclaimer 70
|
Notice of Defaults 71
|
[Reserved] 71
|
Compensation and Indemnity 71
|
Replacement of Trustee 72
|
Successor Trustee by Merger 73
|
Eligibility; Disqualification 73
|
Section 7.11.
|
Security Documents; Collateral Trust Agreement 73
|
74
|
Option to Effect Defeasance 74
|
Defeasance and Discharge 74
|
Conditions to Defeasance 74
|
Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions 75
|
Repayment to the Issuer 76
|
Reinstatement 76
|
76
|
Without Consent of Holders 76
|
With Consent of Holders 78
|
[Reserved] 79
|
Revocation and Effect of Consents and Waivers 79
|
Notation on or Exchange of Notes 80
|
Trustee to Sign Amendments 80
|
81
|
Guarantee 81
|
Limitation on Liability; Termination, Release and Discharge 82
|
Right of Contribution 83
|
No Subrogation 83
|
Article XI. SATISFACTION AND DISCHARGE
|
84
|
Satisfaction and Discharge 84
|
Application of Trust Money 85
|
86
|
Security 86
|
Collateral Trust Agreement 88
|
Section 12.3.
|
Release of Liens in Respect of Notes 89
|
Collateral Access Agreement 89
|
Relative Rights. 90
|
Further Assurances; Maintenance of Properties; Compliance with Laws; Insurance. 90
|
Article XIII. MISCELLANEOUS
|
91
|
Notices 91
|
[Reserved] 93
|
Section 13.3.
|
Certificate and Opinion as to Conditions Precedent 93
|
Statements Required in Certificate or Opinion 93
|
When Notes Disregarded 93
|
Rules by Trustee, Paying Agent and Registrar 94
|
Legal Holidays 94
|
Section 13.8.
|
Governing Law 94
|
Jurisdiction 94
|
Waivers of Jury Trial 94
|
USA PATRIOT Act 94
|
No Recourse Against Others 95
|
Successors 95
|
Section 13.14.
|
Multiple Originals 95
|
Table of Contents; Headings 95
|
Force Majeure 95
|
Severability 95
|
Appointment of Co-Trustee 96
|
EXHIBIT C
|
Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S
|
EXHIBIT D
|
Designated Real Estate Assets
|