<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______ to _________
Commission File Number 0-6074
Nordstrom, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Washington 91-0515058
______________________________ _________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1501 Fifth Avenue, Seattle, Washington 98101
____________________________________________________
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 206-628-2111
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES X NO
____ ____
Common stock outstanding as of August 19, 1994: 82,148,621 shares of
common stock.
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NORDSTROM, INC. AND SUBSIDIARIES
--------------------------------
INDEX
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Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Earnings
Three and six months ended
July 31, 1994 and 1993 3
Consolidated Balance Sheets
July 31, 1994 and 1993 and
January 31, 1994 4
Consolidated Statements of Cash Flows
Six months ended July 31, 1994 and 1993 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K 8
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NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in thousands except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended July 31, Ended July 31,
--------------------- ---------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $1,079,501 $1,017,582 $1,841,563 $1,713,141
Costs and expenses:
Cost of sales and related
buying and occupancy 723,660 711,017 1,233,795 1,193,605
Selling, general and
administrative 267,596 248,331 482,460 456,530
Interest, net 7,206 9,816 15,148 19,686
Service charge income
and other, net (23,184) (21,733) (46,836) (45,226)
---------- ---------- ---------- ----------
Total costs and
expenses 975,278 947,431 1,684,567 1,624,595
---------- ---------- ---------- ----------
Earnings before
income taxes 104,223 70,151 156,996 88,546
Income taxes 41,200 27,500 62,000 34,600
---------- ---------- ---------- ----------
Net earnings $ 63,023 $ 42,651 $ 94,996 $ 53,946
========== ========== ========== ==========
Net earnings per average
share of common stock $ .77 $ .52 $ 1.16 $ .66
========== ========== ========== ==========
Cash dividends paid
per share of common
stock outstanding $ .10 $ .085 $ .185 $ .17
========== ========== ========== ==========
</TABLE>
These statements should be read in conjunction with the Notes to Consolidated
Financial Statements contained herein and in the Nordstrom 1993 Annual Report
to Shareholders.
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NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
July 31, January 31, July 31,
1994 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 50,690 $ 91,222 $ 98,861
Accounts receivable, net 630,085 586,441 613,907
Merchandise inventories 639,227 585,602 612,007
Prepaid income taxes and other 51,529 51,649 48,995
---------- ---------- ----------
Total current assets 1,371,531 1,314,914 1,373,770
Property, buildings and
equipment, net 917,066 845,596 819,712
Other assets 23,653 16,971 12,402
---------- ---------- ----------
$2,312,250 $2,177,481 $2,205,884
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 115,738 $ 40,337 $ 87,971
Accounts payable 339,660 264,055 320,919
Accrued salaries, wages
and taxes 156,600 156,947 148,041
Accrued expenses 33,230 35,994 32,304
Accrued income taxes 22,710 27,988 21,146
Current portion of
long-term debt 36,179 102,164 107,076
---------- ---------- ----------
Total current liabilities 704,117 627,485 717,457
Long-term debt 310,688 336,410 346,911
Deferred income taxes and other 48,676 47,082 49,184
Shareholders' equity:
Common stock, without par value:
250,000,000 shares authorized;
82,134,350, 82,059,128 and
81,988,465 shares issued
and outstanding 159,831 157,374 155,731
Retained earnings 1,088,938 1,009,130 936,601
---------- ---------- ----------
Total shareholders' equity 1,248,769 1,166,504 1,092,332
---------- ---------- ----------
$2,312,250 $2,177,481 $2,205,884
========== ========== ==========
</TABLE>
These statements should be read in conjunction with the Notes to Consolidated
Financial Statements contained herein and in the Nordstrom 1993 Annual Report
to Shareholders.
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NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months
Ended July 31,
-------------------
1994 1993
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 94,996 $ 53,946
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 50,499 49,383
Change in:
Accounts receivable, net (43,644) (10,709)
Merchandise inventories (53,625) (75,268)
Prepaid income taxes and other 120 1,776
Accounts payable 75,605 100,743
Accrued salaries, wages and taxes (347) (9,987)
Accrued expenses (2,764) 1,163
Income tax liabilities and other (3,684) (1,200)
-------- --------
Net cash provided by operating activities 117,156 109,847
-------- --------
INVESTING ACTIVITIES:
Additions to property, buildings
and equipment, net (121,709) (44,693)
Other (6,942) (3,478)
-------- --------
Net cash used in investing activities (128,651) (48,171)
-------- --------
FINANCING ACTIVITIES:
Increase in notes payable 75,401 49,652
Proceeds from issuance of common stock 2,457 291
Principal payments on long-term debt (91,707) (27,958)
Cash dividends paid (15,188) (13,936)
-------- --------
Net cash (used in) provided by
financing activities (29,037) 8,049
-------- --------
Net (decrease) increase in cash
and cash equivalents (40,532) 69,725
Cash and cash equivalents
at beginning of period 91,222 29,136
-------- --------
Cash and cash equivalents at end of period $ 50,690 $ 98,861
======== ========
</TABLE>
These statements should be read in conjunction with the Notes to Consolidated
Financial Statements contained herein and in the Nordstrom 1993 Annual Report
to Shareholders.
5 of 9
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NORDSTROM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
(unaudited)
Note 1:
The consolidated balance sheets of Nordstrom, Inc. and subsidiaries as
of July 31, 1994 and 1993, and the related consolidated statements of
earnings and cash flows for the periods then ended, have been prepared
from the accounts without audit.
The consolidated financial information is applicable to interim periods
and is not necessarily indicative of the results to be expected for the
year ending January 31, 1995.
It is not considered necessary to include detailed footnote information
as of July 31, 1994 and 1993. The financial information should be read
in conjunction with the Notes to Consolidated Financial Statements
contained in the Nordstrom 1993 Annual Report to Shareholders.
In the opinion of management, the consolidated financial information
includes all adjustments (consisting only of normal, recurring
adjustments) necessary to present fairly the financial position of
Nordstrom, Inc. and subsidiaries as of July 31, 1994 and 1993, and the
results of their operations and cash flows for the periods then ended,
in accordance with generally accepted accounting principles applied on a
consistent basis.
Note 2: The components of net interest are as follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended July 31, Ended July 31,
1994 1993 1994 1993
--------------- -----------------
<S> <C> <C> <C> <C>
Interest expense $9,649 $10,378 $19,296 $20,727
Interest income (600) (374) (1,319) (680)
Capitalized interest (1,843) (188) (2,829) (361)
------ ------- ------- -------
Interest, net $7,206 $ 9,816 $15,148 $19,686
====== ======= ======= =======
Note 3: The summarized unaudited combined results of operations
of Nordstrom Credit, Inc. and Nordstrom National Credit
Bank are as follows:
<CAPTION>
Three Months Six Months
Ended July 31, Ended July 31,
1994 1993 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
Service charge and
merchant fee income $24,411 $23,589 $49,153 $47,601
Earnings before income
taxes 8,102 7,537 18,387 16,176
Net earnings 5,162 4,790 11,747 10,354
</TABLE>
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NORDSTROM, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Management Discussion and Analysis section of the Nordstrom 1993 Annual
Report to Shareholders.
Results of Operations:
- ----------------------
During the second quarter of 1994, sales increased 6.1% when compared
with the same quarter of 1993. For the six-month period, sales
increased 7.5% compared to the same period in 1993. Sales for
comparable stores increased 4.0% during the quarter and 5.2% for the
six-month period, with the remainder of the increase coming from new
units. The Company has continued to experience improving sales trends
in all areas of its operations; however, the Company remains cautious
with respect to sales predictions for the remainder of the year.
Cost of sales and related buying and occupancy costs decreased as a
percentage of sales for the quarter and the six-month period as compared
to the corresponding periods in 1993, due primarily to improvement in
merchandise margins, most notably for women's apparel. Buying and
occupancy costs also decreased as a percentage of sales for the quarter
and six-month period.
Selling, general and administrative expenses increased as a percentage
of sales during the second quarter as compared to the same period in
1993, due primarily to increased sales promotion and selling costs. For
the six-month period, selling, general and administrative expenses
decreased when compared to the same period in 1993. Most expense
categories have shown improvement for the first six months. Specific
areas which decreased significantly included employee benefits and bad
debts.
For the quarter and six-month period, interest expense decreased as
a percentage of sales when compared to the corresponding periods in
1993, due to lower levels of debt. The decrease was partially offset by
an increase in short-term interest rates.
Income taxes as a percentage of earnings before income taxes increased
when compared to 1993 for both the quarter and six-month period due to
the effects of the Omnibus Budget Reconciliation Tax Act, which was
signed into law on August 10, 1993.
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NORDSTROM, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition:
- --------------------
The Company's financial condition remains strong and the Company has
continued to fund most of its operations internally. However, with its
increased spending on expansion and the start of the Company's VISA
credit card in May, the Company expects to require additional external
capital later this year.
As a result of the increase in investment in new store construction, the
Company's working capital at July 31, 1994 decreased compared to January
31, 1994.
In August, the Company opened a full-line store in Santa Anita Mall in
Arcadia, California, and an expanded store in Washington Square Mall in
Portland, Oregon. Construction is progressing as planned on new stores
scheduled to open later this year and in 1995.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
The Company is not involved in any pending legal proceedings, other than
routine litigation in the ordinary course of business.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
(27.1) Financial Data Schedule is filed herewith electronically.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which this
report is filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORDSTROM, INC.
(Registrant)
/s/ John A. Goesling
__________________________________________
John A. Goesling, Executive Vice President
and Treasurer
(Principal Financial and Accounting Officer)
Date: September 2, 1994
_________________________
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NORDSTROM INC. AND SUBSIDIARIES
Exhibit Index
<TABLE>
<CAPTION>
Exhibit Method of Filing
- --------------------------------------- ----------------
<S> <C>
27.1 Financial Data Schedule Filed herewith electronically
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JUL-31-1994
<CASH> 50690
<SECURITIES> 0
<RECEIVABLES> 630085
<ALLOWANCES> 0
<INVENTORY> 639227
<CURRENT-ASSETS> 1371531
<PP&E> 917066
<DEPRECIATION> 0
<TOTAL-ASSETS> 2312250
<CURRENT-LIABILITIES> 704117
<BONDS> 310688
<COMMON> 159831
0
0
<OTHER-SE> 1088938
<TOTAL-LIABILITY-AND-EQUITY> 2312250
<SALES> 1841563
<TOTAL-REVENUES> 1841563
<CGS> 1233795
<TOTAL-COSTS> 1684567
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15148
<INCOME-PRETAX> 156996
<INCOME-TAX> 62000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 94996
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.16
</TABLE>
