<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 October 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 November 18, 1994: 82,192,486 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 nine months ended
October 31, 1994 and 1993 3
Consolidated Balance Sheets
October 31, 1994 and 1993 and
January 31, 1994 4
Consolidated Statements of Cash Flows
Nine months ended October 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 Nine Months
Ended October 31, Ended October 31,
--------------------- ---------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 861,968 $ 769,373 $2,703,531 $2,482,514
Costs and expenses:
Cost of sales and related
buying and occupancy 569,312 524,316 1,803,107 1,717,921
Selling, general and
administrative 246,307 216,330 728,767 672,860
Interest, net 7,705 9,329 22,853 29,015
Service charge income
and other, net (24,435) (22,658) (71,271) (67,884)
---------- ---------- ---------- ----------
Total costs and
expenses 798,889 727,317 2,483,456 2,351,912
---------- ---------- ---------- ----------
Earnings before
income taxes 63,079 42,056 220,075 130,602
Income taxes 25,000 16,600 87,000 51,200
---------- ---------- ---------- ----------
Net earnings $ 38,079 $ 25,456 $ 133,075 $ 79,402
========== ========== ========== ==========
Net earnings per average
share of common stock $ .46 $ .31 $ 1.62 $ .97
========== ========== ========== ==========
Cash dividends paid
per share of common
stock outstanding $ .10 $ .085 $ .285 $ .255
========== ========== ========== ==========
</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.
3 of 9
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NORDSTROM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
October 31, January 31, October 31,
1994 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 43,995 $ 91,222 $ 66,939
Accounts receivable, net 580,408 586,441 533,438
Merchandise inventories 849,102 585,602 760,957
Prepaid income taxes and other 52,800 51,649 50,403
---------- ---------- ----------
Total current assets 1,526,305 1,314,914 1,411,737
Property, buildings and
equipment, net 950,489 845,596 821,627
Other assets 14,324 16,971 14,541
---------- ---------- ----------
$2,491,118 $2,177,481 $2,247,905
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 196,393 $ 40,337 $ 79,177
Accounts payable 426,486 264,055 360,075
Accrued salaries, wages
and taxes 161,038 156,947 146,952
Accrued expenses 36,583 35,994 40,146
Accrued income taxes 3,135 27,988 7,919
Current portion of
long-term debt 36,179 102,164 107,076
---------- ---------- ----------
Total current liabilities 859,814 627,485 741,345
Long-term debt 297,960 336,410 346,705
Deferred income taxes and other 53,129 47,082 48,548
Shareholders' equity:
Common stock, without par value:
250,000,000 shares authorized;
82,188,686, 82,059,128 and
82,016,788 shares issued
and outstanding 161,413 157,374 156,221
Retained earnings 1,118,802 1,009,130 955,086
---------- ---------- ----------
Total shareholders' equity 1,280,215 1,166,504 1,111,307
---------- ---------- ----------
$2,491,118 $2,177,481 $2,247,905
========== ========== ==========
</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>
Nine Months
Ended October 31,
-------------------
1994 1993
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $133,075 $ 79,402
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 78,901 75,246
Change in:
Accounts receivable, net 6,033 69,760
Merchandise inventories (263,500) (224,218)
Prepaid income taxes and other (1,151) 368
Accounts payable 162,431 139,899
Accrued salaries, wages and taxes 4,091 (11,076)
Accrued expenses 589 9,005
Income tax liabilities and other (18,806) (15,063)
-------- --------
Net cash provided by operating activities 101,663 123,323
-------- --------
INVESTING ACTIVITIES:
Additions to property, buildings
and equipment, net (183,432) (72,341)
Other 2,285 (5,747)
-------- --------
Net cash used in investing activities (181,147) (78,088)
-------- --------
FINANCING ACTIVITIES:
Increase in notes payable 156,056 40,858
Proceeds from issuance of common stock 4,039 782
Principal payments on long-term debt (104,435) (28,164)
Cash dividends paid (23,403) (20,908)
-------- --------
Net cash provided by (used in)
financing activities 32,257 (7,432)
-------- --------
Net (decrease) increase in cash
and cash equivalents (47,227) 37,803
Cash and cash equivalents
at beginning of period 91,222 29,136
-------- --------
Cash and cash equivalents at end of period $ 43,995 $ 66,939
======== ========
</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 October 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 October 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 October 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 summarized unaudited combined results of operations
of Nordstrom Credit, Inc. and Nordstrom National Credit
Bank are as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended October 31, Ended October 31,
1994 1993 1994 1993
----------------- ----------------
<S> <C> <C> <C> <C>
Service charge and
merchant fee income $26,745 $23,936 $75,898 $71,537
Earnings before
income taxes 9,085 8,669 27,472 24,845
Net earnings 5,755 5,546 17,502 15,900
</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 third quarter of 1994, sales increased 12.0% when compared
with the same quarter of 1993. For the nine-month period, sales
increased 8.9% compared to the same period in 1993. Sales for
comparable stores increased 6.7% during the quarter and 5.6% for the
nine-month period, with the remainder of the increase coming from new
units. The increase in comparable stores sales for the third quarter
was partially due to a shift in the Company's Anniversary Sale, which
resulted in an additional one-week period of the sale occurring in the
third quarter of 1994, compared to 1993. Without the effect of the
shift, management estimates the Company's comparable stores sales
increase for the third quarter would have been approximately 2% lower.
The Company has experienced a gradual decline in comparable store sales
increases in 1994.
Cost of sales and related buying and occupancy costs decreased as a
percentage of sales for the quarter and the nine-month period due
to improved merchandise margins, most notably for women's apparel,
and a decrease in occupancy costs. For the quarter, the decrease was
partially offset by an increase in buying expense. The improving trend
in merchandise margins for women's apparel began in the fourth quarter
of 1993. As a result, management does not anticipate as significant an
improvement in merchandise margins in the fourth quarter of 1994, as
compared to the same quarter of 1993.
Selling, general and administrative expenses increased as a percentage
of sales during the third quarter of 1994, as compared to the same
quarter of 1993, due primarily to increased sales promotion and selling
costs. For the nine-month period, selling, general and administrative
expenses decreased as a percentage of sales when compared to the same
period in the prior year, due primarily to decreased employee benefits
and bad debts.
Financial Condition:
- --------------------
The Company's financial condition remains strong. With increased
spending on expansion and the start of the Company's VISA credit card
program in May, the Company has required some external financing.
7 of 9
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NORDSTROM, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition (continued):
- --------------------------------
During the quarter, Nordstrom Credit, Inc. filed a shelf registration
statement on Form S-3 for $250 million in debt, and subsequent to
quarter-end issued $50 million in medium-term notes under the shelf
registration.
The Company opened two new full-line stores during the third quarter in
Santa Anita Mall in Arcadia, California and Old Orchard Mall in Skokie,
Illinois. In addition, the Company also opened an expanded store in
Washington Square in Portland, Oregon and an expanded store in Bellevue
Square in Bellevue, Washington during the quarter. This completes the
store opening schedule for the year. Construction is progressing as
planned on new stores scheduled to open 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: December 2, 1994
_________________________
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<PAGE>
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> 9-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> OCT-31-1994
<CASH> 43995
<SECURITIES> 0
<RECEIVABLES> 580408
<ALLOWANCES> 0
<INVENTORY> 849102
<CURRENT-ASSETS> 1526305
<PP&E> 950489
<DEPRECIATION> 0
<TOTAL-ASSETS> 2491118
<CURRENT-LIABILITIES> 859814
<BONDS> 297960
<COMMON> 161413
0
0
<OTHER-SE> 1118802
<TOTAL-LIABILITY-AND-EQUITY> 2491118
<SALES> 2703531
<TOTAL-REVENUES> 2703531
<CGS> 1803107
<TOTAL-COSTS> 2483456
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22853
<INCOME-PRETAX> 220075
<INCOME-TAX> 87000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 133075
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
</TABLE>
