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NORDSTROM ANNOUNCES NON-RECURRING CHARGES AND THIRD QUARTER EARNINGS
EXPECTATIONS
SEATTLE, Wash. - Oct. 11, 2000 - Nordstrom Inc. (NYSE: JWN) announced
today that several non-recurring charges and lower-than-anticipated
operating results will affect third quarter 2000 earnings.
The non-recurring pre-tax charges include an impairment charge estimated
between $18 to $20 million related to its 1998 investment in Streamline.com,
Inc.; an estimated $13 million in severance costs associated with senior
management restructuring during the third quarter of 2000; and a charge of
$10 million for the write-off of certain information technology investments
unrelated to the company's strategic systems initiative launched in February
2000. Of the total $41 to $43 million in non-recurring charges, over $30
million are non-cash items. The non-recurring charges collectively are
expected to impact third quarter 2000 results by $0.19 to $0.20 per share.
The impairment charge recognizes the decline in the value of the
company's investment in Streamline.com, Inc. The precise amount of the
charge will be determined by the market value of the investment on Oct. 31,
2000. The company previously recognized a charge of $10.5 million in the
second quarter of 2000 related to its investment in Streamline.com, Inc.,
and expects the investment to be valued on Nordstrom's books at
approximately $2 million following the anticipated charge.
Additionally, lower-than-anticipated sales, above-plan markdowns and
miscellaneous general and administrative expenses, are expected to lower
operating results by $0.04 to $0.07 per share. Those anticipated results
and the non-recurring charges would reduce earnings by $0.23 to $0.27 per
share relative to the current First Call consensus estimate of $0.25.
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"Most of the factors reducing our third quarter results are not related
to day-to-day operations," said Blake Nordstrom, president of Nordstrom,
Inc. "Given recent changes in management, we are currently undertaking a
thorough review of our business, listening to feedback from our customers
and employees, and focusing on strong execution during the upcoming holiday
season."
Nordstrom expects to report results for its fiscal third quarter, ending
Oct. 31, 2000, after the close of market on Wednesday, Nov. 15, 2000. A
conference call is planned for 1:30 p.m. (Pacific Standard Time) that day.
The conference call may be heard over the internet by accessing Nordstrom's
web site at www.NORDSTROM.com, then clicking on the "About Us" and
"Investor Relations" options. A replay of the call will be available on
Nordstrom's web site for several days thereafter.
Nordstrom, Inc. is one of the nation's leading fashion specialty
retailers, with 116 stores located in 23 states, including 76 full-line
stores, 34 Nordstrom Racks, three Faconnable boutiques, two free-standing
shoe stores, and one clearance store. The company also serves customers
online at NORDSTROM.com and NORDSTROMshoes.com, as well as through its
direct mail catalogs.
Certain statements in this news release contain "forward-looking"
information (as defined in the Private Securities Litigation Reform Act of
1995) that involves risks and uncertainties, including anticipated store
openings and distribution channels, planned capital expenditures, and trends
in company operations. Actual future results and trends may differ
materially depending upon a variety of factors including, but not limited
to, the company's ability to source and manage appropriate inventory,
predict fashion trends and consumer apparel buying patterns, and control
costs and expenses; weather conditions; hazards of nature such as
earthquakes and floods; trends in personal bankruptcies and bad debt write-
offs; completion of severance arrangements and employee relations; the
company's ability to continue its expansion plans; and the impact of
economic and competitive market forces. The company's SEC reports may
contain other information on these and other factors which could affect our
financial results and cause actual results to differ from any forward-
looking information we may provide.
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