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.