Nordstrom, Inc. (NYSE:JWN) today reported net earnings of $105 million, or $0.48 per diluted share, for the second quarter ended August 1, 2009. For the same quarter last year, Nordstrom reported net earnings of $143 million, or $0.65 per diluted share.

Net sales in the second quarter were $2.14 billion, a decrease of 6.2 percent compared with sales of $2.29 billion during the same period in fiscal 2008. Second quarter same-store sales decreased 9.8 percent compared with the same period in fiscal 2008.

SECOND QUARTER SUMMARY

The company’s second quarter typically is the second largest of the year in terms of net sales, containing three of the company’s five annual sales events: Half-Yearly Sale for Women and Kids, Half-Yearly Sale for Men, and the Anniversary Sale. For the second quarter, solid execution of the Anniversary sale combined with disciplined inventory and expense management allowed the company to exceed its earnings plans.

• Full-line same-store sales in the second quarter decreased 12.3 percent and sales for Nordstrom Direct increased 3.5 percent compared with the same period in fiscal 2008. Sales performance during the Anniversary event was better than expected at negative 6.6 percent for full-line stores compared with the Anniversary event last year. For the second quarter, top-performing merchandise categories for full-line stores and Nordstrom Direct combined were Dresses, Kids’ Shoes and Apparel, and Fashion Jewelry, while the South and Mid-Atlantic regions were the top-performing geographic areas for full-line stores.
• Nordstrom Rack continued its positive performance with a same-store sales increase of 0.8 percent in the second quarter compared with the same period in fiscal 2008.
• Gross profit, as a percentage of net sales, decreased 106 basis points compared with last year’s second quarter. The decline was mostly attributable to the impact of fixed buying and occupancy expenses as a percentage of reduced sales. Merchandise margin, as a percentage of net sales, was flat compared to last year’s second quarter. Inventory levels remained aligned with the company’s sales trends. Quarter-end inventory per square foot was down 12 percent from the same period in the prior year, compared to sales per square foot down 11 percent.
• Retail selling, general and administrative expenses decreased $14 million compared with last year’s second quarter, despite an additional $15 million in expenses from stores opened since the second quarter of 2008. The company opened 6 full-line stores and 11 Nordstrom Rack stores since the second quarter of 2008, increasing retail square footage by 1.2 million or 5.7 percent.
• Credit selling, general and administrative expenses increased $20 million compared with last year’s second quarter primarily due to higher charge-offs.

EXPANSION UPDATE

In the third quarter of 2009, Nordstrom plans to open a 138,000-square-foot full-line store at Kenwood Towne Centre in Cincinnati, Ohio on September 25th. During the third quarter of 2009, Nordstrom also plans to open six Nordstrom Rack stores at the Shops of Southlake in Southlake, Texas; Arbor Lakes in Maple Grove, Minnesota; Beverly Connection in Los Angeles, California; Hastings Village in Pasadena, California; Westfield Oakridge in San Jose, California, and Gateway Center in Austin, Texas.

FISCAL YEAR 2009 OUTLOOK

The company is revising its outlook for the 2009 fiscal year to reflect the better than expected second quarter performance. For the 2009 fiscal year, Nordstrom expects earnings per diluted share in the range of $1.50 to $1.65, increased from the previous range of $1.25 to $1.50. The company’s revised expectations for fiscal 2009 are as follows:

NEW REVOLVING CREDIT FACILITY

Nordstrom plans to enter into a new three-year $650 million unsecured revolving credit facility to replace the existing $650 million unsecured revolving credit facility which matures in November 2010. The new facility is intended to be used for general corporate purposes and will mature in August 2012. The closing is subject to satisfaction of customary closing conditions, including documentation. The company has obtained commitments from lenders for the new revolving credit facility of $650 million, which it intends to complete later this week.

CONFERENCE CALL INFORMATION

The company’s senior management will host a conference call to discuss second quarter results at 4:45 p.m. Eastern Daylight Time today. To listen, please dial 630-395-0076 (passcode: NORD). A telephone replay will be available beginning approximately one hour after the conclusion of the call by dialing 203-369-0439 until the close of business on August 20, 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 November 11, 2009.

ABOUT NORDSTROM

Nordstrom, Inc. is one of the nation’s leading fashion specialty retailers, with 175 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 111 full-line stores, 61 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.