SEATTLE, Nov 12, 2009 (BUSINESS WIRE) ----Nordstrom, Inc. (NYSE: JWN) today reported net earnings of $83 million, or $0.38 per diluted share, for the third quarter ended October 31, 2009. For the same quarter last year, Nordstrom reported net earnings of $71 million, or $0.33 per diluted share.

Third quarter same-store sales decreased 1.2 percent compared with the same period in fiscal 2008. Net sales in the third quarter were $1.87 billion, an increase of 3.5 percent compared with net sales of $1.80 billion during the same period in fiscal 2008.

THIRD QUARTER SUMMARY

Performance during the third quarter exceeded the internal sales and earnings plans for the company. Although there is continued uncertainty around consumer spending, the company experienced an improving trend in same-store sales in each month of the quarter while effectively managing inventory and expenses.

-- Full-line same-store sales in the third quarter decreased 4.2 percent and sales for Nordstrom Direct increased 16.4 percent compared with the same period in fiscal 2008. A number of the company's merchandise categories generated positive same-store sales during the quarter. Highlights for full-line stores and Nordstrom Direct combined included Fashion Jewelry, Women's Better Apparel and Shoes. The Mid-Atlantic and the South regions were the top-performing geographic areas for full-line stores relative to the third quarter of 2008, while the Mid-Atlantic and Northeast regions achieved the largest sequential improvements over the second quarter of 2009. During the third quarter, the company opened one Nordstrom full-line store in Cincinnati.

-- Nordstrom Rack had positive performance with a same-store sales increase of 3.0 percent in the third quarter compared with the same period in fiscal 2008. This is the third consecutive quarter of positive same-store sales results. During the third quarter, the company opened six Nordstrom Rack stores.

-- Gross profit, as a percentage of net sales, increased approximately 90 basis points compared with last year's third quarter. The improvement in merchandise margin, as a percentage of net sales, was partially offset by the impact of an increase in performance-related expense included in buying and occupancy costs. The company continued to carefully manage inventory levels, with quarter-end inventory per square foot declining 10.7 percent from the same period in the prior year. At the same time, the company had better-than-expected sales improvement, with sales per square foot declining 1.2 percent for the quarter. The company believes it is well positioned to have a solid flow of fresh merchandise throughout the holiday season.

-- Retail selling, general and administrative expenses increased $10 million compared with last year's third quarter. While fixed expenses decreased, they were more than offset by an increase in performance-related expense due to higher than planned sales and earnings results. Retail selling, general and administrative expenses also were impacted by an additional $12 million from stores opened since the third quarter of 2008. The company opened 4 full-line stores and 13 Nordstrom Rack stores since the third quarter of 2008, increasing retail square footage by 1.0 million, or 4.5 percent.

-- Credit selling, general, and administrative expenses increased $4 million compared with last year's third quarter. Based on current credit trends, the company increased its reserve for bad debt by $6 million. This was partially offset by $2 million in improvements in Operational and Marketing expenses.

CAPITAL INVESTMENT AND EXPANSION UPDATE

The company's capital expenditures, net of property incentives, are expected to total between $325 and $375 million in fiscal year 2010, compared to approximately $280 million in fiscal year 2009. The company expects to open 3 full-line stores and approximately 15 Nordstrom Rack stores in 2010. In 2011, the company expects to open 2-3 full-line stores and 13-15 Nordstrom Rack stores.

During the third quarter of 2009, Nordstrom opened the following stores:

  Location                 Store Name              Square Footage
   Full-Line Stores
   Cincinnati, Ohio         Kenwood Towne Centre    144,000
   Nordstrom Rack Stores
   Austin, Texas            Gateway Center          35,000
   Los Angeles, California  Beverly Connection      30,000
   Maple Grove, Minnesota   Arbor Lakes             34,000
   Pasadena, California     Hastings Village        42,000
   San Jose, California     Westfield Oakridge      30,000
   Southlake, Texas         The Shops of Southlake  36,000
   

On November 6, 2009, Nordstrom opened a Nordstrom Rack store at Millenia Crossing in Orlando, Florida. Also in the fourth quarter, the company plans to open a Nordstrom Rack store at Rookwood Pavilion in Cincinnati, Ohio.

FISCAL YEAR 2009 OUTLOOK

The company is updating its outlook for the 2009 fiscal year due to the improved performance in the third quarter, as well as the improved outlook for the remainder of the year. For the 2009 fiscal year, Nordstrom expects earnings per diluted share in the range of $1.83 to $1.88, increased from the previous range of $1.50 to $1.65. The company's revised expectations for fiscal 2009 compared with fiscal 2008 are as follows:

  Same-store Sales                                 6 percent to 7 percent decrease
   Credit Card Revenues                             $70 to $75 million increase
   Gross Profit (%)                                 10 to 20 basis point increase
   Retail Selling, General and Admin. Expense ($)   $15 to $40 million decrease
   Credit Selling, General and Admin. Expense ($)   $55 to $60 million increase
   Total Selling, General and Admin. Expense (%)    80 to 90 basis point increase
   Interest Expense, net                            $5 to $10 million increase
   Effective Tax Rate                               36.5 percent to 37.0 percent
   Earnings per Diluted Share                       $1.83 to $1.88
   Diluted Shares Outstanding                       219.4 million
   

CONFERENCE CALL INFORMATION

The company's senior management will host a conference call to discuss third quarter results at 4:45 p.m. Eastern Standard Time today. To listen, please dial 517-308-9140 (passcode: NORD). A telephone replay will be available beginning approximately one hour after the conclusion of the call by dialing 402-998-0454 (passcode: 6673) until the close of business on November 19, 2009. Interested parties may also listen to the live call over the Internet by visiting the Investor Relations section of the company's corporate Web site at http://investor.nordstrom.com. An archived webcast will be available in the Webcasts section through February 10, 2010.

ABOUT NORDSTROM

Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 183 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 112 full-line stores, 68 Nordstrom Racks, two Jeffrey boutiques, and one clearance store. Nordstrom also serves customers through its online presence at http://www.nordstrom.com and through its catalogs. Nordstrom, Inc's common stock is publicly traded on the NYSE under the symbol JWN.

Certain statements in this news release contain "forward-looking" information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties, including, but not limited to, anticipated financial outlook for the fiscal year ending January 30, 2010, anticipated annual same-store sales rate, anticipated store openings, anticipated capital expenditures for fiscal year 2010 and trends in company operations. Such statements are based upon current beliefs and expectations of the company's management and are subject to significant risks and uncertainties. Actual future results may differ materially from historical results or current expectations depending upon factors including but not limited to the impact of deteriorating economic and market conditions and the resultant impact on consumer spending patterns, the company's ability to respond to the business environment and fashion trends, the company's ability to safeguard its brand and reputation, effective inventory management, efficient and proper allocation of the company's capital resources, successful execution of the company's store growth strategy including the timely completion of construction associated with newly planned stores, relocations and remodels, all of which may be impacted by the financial health of third parties, the company's compliance with applicable banking and related laws and regulations impacting the company's ability to extend credit to its customers, trends in personal bankruptcies and bad debt write-offs, availability and cost of credit, impact of the current regulatory environment and financial system reforms, changes in interest rates, disruptions in the company's supply chain, the company's ability to maintain its relationship with vendors and developers who may be experiencing economic difficulties, the geographic locations of the company's stores, the company's ability to maintain its relationships with its employees and to effectively train and develop its future leaders, the company's compliance with information security and privacy laws and regulations, employment laws and regulations and other laws and regulations applicable to the company, successful execution of the company's information technology strategy, successful execution of the company's multi-channel strategy, risks related to fluctuations in world currencies, weather conditions and hazards of nature that affect consumer traffic and consumers' purchasing patterns, the effectiveness of planned advertising, marketing, and promotional campaigns, and the company's ability to control costs. Our SEC reports, including our Form 10-K for the fiscal year ended January 31, 2009 and its Form 10-Q for the fiscal quarter ended August 1, 2009 contain other information on these and other factors that could affect our financial results and cause actual results to differ materially from any forward-looking information we may provide. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

NORDSTROM, INC.
   CONSOLIDATED STATEMENTS OF
   EARNINGS - 3rd Quarter
   (unaudited; amounts in millions, except per share data)
   Quarter       Quarter
   ended         ended
   10/31/09      11/1/08
   Net sales                                          $ 1,868       $ 1,805
   Credit card revenues                                 95            74
   Total revenues                                       1,963         1,879
   Cost of sales and related buying & occupancy costs   (1,210   )    (1,185  )
   Selling, general and administrative expenses:
   Retail stores, direct and other segments             (500     )    (490    )
   Credit segment                                       (81      )    (77     )
   Earnings before interest and income taxes            172           127
   Interest expense, net                                (38      )    (33     )
   Earnings before income taxes                         134           94
   Income tax expense                                   (51      )    (23     )
   Net earnings                                       $ 83          $ 71
   Earnings per share
   Basic                                              $ 0.38        $ 0.33
   Diluted                                            $ 0.38        $ 0.33
   Weighted average shares outstanding
   Basic                                                217.1         215.6
   Diluted                                              220.7         218.1
   

NORDSTROM, INC.
   CONSOLIDATED STATEMENTS OF
   EARNINGS - Year-to-Date
   (unaudited; amounts in millions, except per share data)
   Nine months        Nine months
   ended              ended
   10/31/09           11/1/08
   Net sales                                           $      5,719       $      5,971
   Credit card revenues                                       268                216
   Total revenues                                             5,987              6,187
   Cost of sales and related buying & occupancy costs         (3,735   )         (3,852  )
   Selling, general and administrative expenses:
   Retail stores, direct and other segments                   (1,478   )         (1,528  )
   Credit segment                                             (250     )         (184    )
   Earnings before interest and income taxes                  524                623
   Interest expense, net                                      (105     )         (98     )
   Earnings before income taxes                               419                525
   Income tax expense                                         (150     )         (192    )
   Net earnings                                        $      269         $      333
   Earnings per share
   Basic                                               $      1.24        $      1.54
   Diluted                                             $      1.23        $      1.52
   Weighted average shares outstanding
   Basic                                                      216.5              216.9
   Diluted                                                    219.0              219.8
   

NORDSTROM, INC.
   CONSOLIDATED BALANCE SHEETS
   (unaudited; amounts in millions)
   10/31/09        1/31/09        11/1/08
   Assets
   Current assets:
   Cash and cash equivalents                     $  484          $  72          $  68
   Accounts receivable, net                         2,016           1,942          1,918
   Merchandise inventories                          1,193           900            1,278
   Current deferred tax assets, net                 230             210            196
   Prepaid expenses and other                       84              93             100
   Total current assets                             4,007           3,217          3,560
   Land, buildings and equipment, net               2,239           2,221          2,215
   Goodwill                                         53              53             53
   Other assets                                     217             170            236
   Total assets                                  $  6,516        $  5,661       $  6,064
   Liabilities and Shareholders' Equity
   Current liabilities:
   Commercial paper                              $  -            $  275         $  102
   Accounts payable                                 980             563            805
   Accrued salaries, wages and related benefits     255             214            202
   Other current liabilities                        520             525            503
   Current portion of long-term debt                356             24             425
   Total current liabilities                        2,111           1,601          2,037
   Long-term debt, net                              2,259           2,214          2,215
   Deferred property incentives, net                470             435            417
   Other liabilities                                246             201            233
   Commitments and contingencies
   Shareholders' equity:
   Common stock, no par value: 1,000 shares
   authorized; 217.3, 215.4, and 215.4 shares
   issued and outstanding                           1,051           997            990
   Retained earnings                                388             223            192
   Accumulated other comprehensive loss             (9       )      (10     )      (20     )
   Total shareholders' equity                       1,430           1,210          1,162
   Total liabilities and shareholders' equity    $  6,516        $  5,661       $  6,064
   

NORDSTROM, INC.
   CONSOLIDATED STATEMENTS OF CASH
   FLOWS
   (unaudited; amounts in millions)
   Nine months       Nine months
   ended             ended
   Operating Activities                                               10/31/09          11/1/08
   Net earnings                                                   $   269           $   333
   Adjustments to reconcile net earnings to net cash provided
   by operating activities:
   Depreciation and amortization of buildings and equipment, net      234               222
   Amortization of deferred property incentives and other, net        (31      )        (30     )
   Stock-based compensation expense                                   24                21
   Deferred income taxes, net                                         (45      )        (59     )
   Tax benefit from stock-based payments                          4                 4
   Excess tax benefit from stock-based payments                       (5       )        (4      )
   Provision for bad debt expense                                     175               106
   Change in operating assets and liabilities:
   Accounts receivable                                                (119     )        (62     )
   Merchandise inventories                                            (264     )        (301    )
   Prepaid expenses and other assets                                  (13      )        18
   Accounts payable                                                   401               280
   Accrued salaries, wages and related benefits                       41                (66     )
   Other current liabilities                                          (1       )        (83     )
   Deferred property incentives                                       86                87
   Other liabilities                                                  45                (12     )
   Net cash provided by operating activities                          801               454
   Investing Activities
   Capital expenditures                                               (281     )        (439    )
   Change in accounts receivable originated at third parties          (129     )        (171    )
   Other, net                                                     1                 2
   Net cash used in investing activities                              (409     )        (608    )
   Financing Activities
   Commercial Paper:
   (Repayments) proceeds from commercial paper borrowings, net        (135     )        102
   Repayment of commercial paper classified as long-term              (140     )    -
   Proceeds from long-term borrowings, net                            399               150
   Principal payments on long-term borrowings                         (24      )        (8      )
   Decrease in cash book overdrafts                               -                     (45     )
   Proceeds from exercise of stock options                            15                13
   Proceeds from employee stock purchase plan                         13                16
   Excess tax benefit from stock-based payments                   5                 4
   Cash dividends paid                                                (104     )        (104    )
   Repurchase of common stock                                     -                     (264    )
   Other, net                                                         (9       )    -
   Net cash provided by (used in) financing activities                20                (136    )
   Net increase (decrease) in cash and cash equivalents               412               (290    )
   Cash and cash equivalents at beginning of period                   72                358
   Cash and cash equivalents at end of period                     $   484           $   68
   

NORDSTROM, INC.
   STATEMENTS OF EARNINGS BY SEGMENT
   (unaudited; amounts in millions, except percentages)
   Retail Stores, Direct and Other Segments
   Our Retail Stores segment includes our full-line and Rack stores;
   our Direct segment includes our online store; and our Other
   segment includes our product development group and corporate
   center operations. The following tables summarize the combined
   results of our Retail Stores, Direct and Other segments for the
   quarter and nine months ended October 31, 2009 compared with the
   quarter and nine months ended November 1, 2008:
   Quarter                         Quarter
   Ended                           Ended
   10/31/09    % of sales(1)       11/1/08     % of sales(1)
   Net sales                                          $     1,868       100.0  %      $     1,805       100.0  %
   Cost of sales and related buying                         (1,198   )  (64.2  %)           (1,174  )   (65.1  %)
   & occupancy costs
   Gross profit                                             670         35.8   %            631         34.9   %
   Other revenues                                           (1       )  N/A           -                 N/A
   Selling, general and administrative                      (500     )  (26.8  %)           (490    )   (27.1  %)
   expenses
   Earnings before interest and income taxes                169         9.0    %            141         7.8    %
   Interest expense, net                                    (27      )  (1.5   %)           (20     )   (1.1   %)
   Earnings before income taxes                       $     142         7.6    %      $     121         6.7    %
   Nine Months                     Nine Months
   Ended                           Ended
   10/31/09    % of sales(1)       11/1/08     % of sales(1)
   Net sales                                          $     5,719       100.0  %      $     5,971       100.0  %
   Cost of sales and related buying & occupancy costs       (3,698   )  (64.7  %)           (3,817  )   (63.9  %)
   Gross profit                                             2,021       35.3   %            2,154       36.1   %
   Other revenues                                           (1       )  N/A           (1              ) N/A
   Selling, general and administrative expenses             (1,478   )  (25.8  %)           (1,528  )   (25.6  %)
   Earnings before interest and income taxes                542         9.5    %            625         10.5   %
   Interest expense, net                                    (74      )  (1.3   %)           (59     )   (1.0   %)
   Earnings before income taxes                       $     468         8.2    %      $     566         9.5    %
   (1)Subtotals and totals may not foot due to rounding.
   

NORDSTROM, INC.
   STATEMENTS OF EARNINGS BY SEGMENT
   (unaudited; amounts in millions)
   Credit Segment
   Our Credit segment earns finance charges and late fee income through
   operation of the Nordstrom private label and Nordstrom VISA credit
   cards. The following tables summarize the results of our Credit
   segment for the quarter and nine months ended October 31, 2009
   compared with the quarter and nine months ended November 1, 2008:
   Quarter             Quarter
   ended               ended
   10/31/09            11/1/08
   Credit card revenues                           $       96          $       74
   Interest expense                                       (11      )          (13     )
   Net credit card income                                 85                  61
   Cost of sales - loyalty program                        (12      )          (11     )
   Selling, general and administrative expenses:
   Operational and marketing expense                      (25      )          (27     )
   Bad debt expense                                       (56      )          (50     )
   Loss before income taxes                       $       (8       )  $       (27     )
   Nine months         Nine months
   ended               ended
   10/31/09            11/1/08
   Credit card revenues                           $       269         $       217
   Interest expense                                       (31      )          (39     )
   Net credit card income                                 238                 178
   Cost of sales - loyalty program                        (37      )          (35     )
   Selling, general and administrative expenses:
   Operational and marketing expense                      (75      )          (78     )
   Bad debt expense                                       (175     )          (106    )
   Loss before income taxes                       $       (49      )  $       (41     )
   

NORDSTROM, INC.

ADJUSTED DEBT TO EBITDAR (NON-GAAP FINANCIAL MEASURE)

(unaudited; amounts in millions)

We use various financial measures in our conference calls, investor meetings, and other forums which may be considered non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. The following disclosure provides additional information regarding our Adjusted Debt to EBITDAR as of October 31, 2009:

Adjusted Debt to EBITDAR is one of our key financial metrics, and we believe that our debt levels are best analyzed using this measure. Our goal today is to manage debt levels at a point which we believe will help us maintain an investment grade credit rating as well as operate with an efficient capital structure for our size, growth plans and industry. Investment grade credit ratings are important to maintaining access to a variety of short-term and long-term sources of funding, and we rely on these funding sources to continue to grow our business. We believe a higher ratio, among other factors, could result in rating agency downgrades. In contrast, we believe a lower ratio would result in a higher cost of capital and could negatively impact shareholder returns. As of October 31, 2009, our Adjusted Debt to EBITDAR was 2.8 compared to 2.3 as of November 1, 2008. The increase was primarily the result of a decrease in earnings before interest and income taxes for the 12 months ended October 31, 2009 compared with the 12 months ended November 1, 2008.

Adjusted Debt to EBITDAR is not a measure of financial performance under GAAP and should not be considered a substitute for debt to net earnings, net earnings or debt as determined in accordance with GAAP. In addition, Adjusted Debt to EBITDAR does have limitations:

-- Adjusted Debt is our best estimate of the total company debt we would incur if we had purchased the property associated with our operating leases;

-- EBITDAR does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, including leases, or the cash requirements necessary to service interest or principal payments on our debt; and

-- Other companies in our industry may calculate Adjusted Debt to EBITDAR differently than we do, limiting its usefulness as a comparative measure.

To compensate for these limitations, we analyze Adjusted Debt to EBITDAR in conjunction with other GAAP financial and performance measures impacting liquidity, including operating cash flows, capital spending and net earnings. The closest GAAP measure is debt to net earnings, which was 7.8 and 5.0 for the third quarter of 2009 and 2008, respectively. The following is a reconciliation of debt to net earnings and Adjusted Debt to EBITDAR:

                                                                 2009(1)     2008(1)
   Debt(2)                                                        $ 2,615     $ 2,742
   Add: rent expense x 8(3)                                         320         284
   Adjusted Debt                                                  $ 2,935     $ 3,026
   Net earnings                                                     337         545
   Add: income tax expense                                          205         334
   Add: interest expense, net                                       138         128
   Earnings before interest and income taxes                        680         1,007
   Add: depreciation and amortization of buildings and equipment    314         288
   Add: rent expense                                                40          36
   EBITDAR                                                        $ 1,034     $ 1,331
   Debt to Net Earnings                                             7.8         5.0
   Adjusted Debt to EBITDAR                                         2.8         2.3
   

(1)The components of adjusted debt are as of October 31, 2009 and November 1, 2008, while the components of EBITDAR are for the 12 months ended October 31, 2009 and November 1, 2008.

(2)Debt includes $102 of commercial paper borrowings outstanding as of November 1, 2008. There were no outstanding commercial paper borrowings as of October 31, 2009.

(3)The multiple of eight times rent expense used to calculate adjusted debt is our best estimate of the debt we would record for our leases which are classified as operating if we had purchased the property.

NORDSTROM, INC.

FREE CASH FLOW (NON-GAAP FINANCIAL MEASURE)

(unaudited; amounts in millions)

We use various financial measures in our conference calls, investor meetings, and other forums which may be considered non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. The following disclosure provides additional information regarding our free cash flow for the nine months ended October 31, 2009 and November 1, 2008:

Free cash flow is one of our key liquidity measures, and we believe that our cash levels are more appropriately analyzed using this measure. Free cash flow is not a measure of liquidity under GAAP and should not be considered a substitute for operating cash flows as determined in accordance with GAAP. In addition, free cash flow does have limitations:

-- Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs; and

-- Other companies in our industry may calculate free cash flow differently than we do, limiting its usefulness as a comparative measure.

To compensate for these limitations, we analyze free cash flow in conjunction with other GAAP financial and performance measures impacting liquidity, including operating cash flows. The closest GAAP measure is net cash provided by operating activities, which was $801 and $454 for the nine months ended October 31, 2009 and November 1, 2008. The following is a reconciliation of our net cash provided by operating activities and free cash flow:

                                                          Nine months       Nine months
   ended             ended
   10/31/09          11/1/08
   Net cash provided by operating activities                 $   801           $   454
   Less: Capital expenditures                                    (281     )        (439    )
   Change in accounts receivable originated at third parties     (129     )        (171    )
   Cash dividends paid                                           (104     )        (104    )
   Decrease in cash book overdrafts                              -                 (45     )
   Free cash flow                                            $   287           $   (305    )
   

SOURCE: Nordstrom, Inc.

   Nordstrom, Inc. 
   Investor Contact: 
   Rob Campbell, 206-303-3290 
   or 
   Media Contact: 
   Colin Johnson, 206-373-3036
   

Copyright Business Wire 2009
   
   **********************************************************************
   
   As of Sunday, 11-08-2009 23:59, the latest Comtex SmarTrend� Alert, 
   an automated pattern recognition system, indicated a DOWNTREND on 
   10-28-2009 for JWN @ $31.32.
   
   For more information on SmarTrend, contact your market data
   provider or go to www.mysmartrend.com
   
   SmarTrend is a registered trademark of Comtex News Network, Inc.
   Copyright � 2004-2009 Comtex News Network, Inc. All rights reserved.