Nordstrom Reports Fourth Quarter 2024 Earnings

Revenue, comparable sales and earnings at or above high end of fiscal 2024 outlook Quarterly sales growth across banners, stores and digital excluding the 53rd week; comparable sales up 4.7 percent Strong EBIT margin in fourth quarter, expanding year-over-year , /PRNewswire/ -- Nordstrom, Inc. (NYSE: JWN) today reported fourth quarter net earnings of $165 million, or $0.97 per diluted share ("EPS"), and earnings before interest and taxes ("EBIT") of $242 million. Excluding privatization fees and an accelerated technology depreciation charge, the Company reported adjusted EBIT of $273 million and adjusted EPS of $1.10.1 For the fiscal year ended February 1, 2025, net earnings were $294 million and EPS was $1.74, with EBIT of $495 million, or 3.4 percent of sales. Excluding charges related primarily to a supply chain asset impairment in the second quarter, accelerated technology depreciation in the third and fourth quarters, and privatization fees in the fourth quarter, adjusted EBIT was $593 million, or 4.1 percent of sales, and adjusted EPS was $2.17 for fiscal 2024.1 For the 13-week fourth quarter in fiscal 2024, total Company net sales decreased 2.1 percent versus the 14-week period in fiscal 2023, or increased 2.5 percent excluding approximately $190 million related to the 53rd week in fiscal 2023. Total Company gross merchandise value ("GMV") decreased 0.2 percent. Nordstrom banner net sales decreased 3.7 percent and GMV decreased 1.0 percent compared with the fourth quarter of 2023. Net sales for Nordstrom Rack increased 1.2 percent.2 Fourth quarter total Company comparable sales increased 4.7 percent versus the realigned 13-week quarter in fiscal 2023. Nordstrom banner comparable sales increased 5.3 percent and Nordstrom Rack comparable sales increased 3.5 percent.3 "Customers responded positively to the strength of our offering across both banners in the fourth quarter," said Erik Nordstrom, chief executive officer of Nordstrom, Inc. "We maintained the momentum we built throughout the year, which resulted in full-year sales and profitability coming in at the high end of our expectations." In the fourth quarter, women's apparel, active and men's apparel had the strongest growth versus 2023. For fiscal 2024, women's apparel, active, men's apparel, kids and shoes were the strongest. "Our team reacted with agility and speed to the holiday environment, responding in real-time to better serve our customers and drive strong financial results," said Pete Nordstrom, president of Nordstrom, Inc. "We consistently executed on our priorities in 2024 and we're grateful to our teams for their hard work to deliver on our purpose of helping customers feel good and look their best." As previously announced on February 26, 2025, the board of directors declared a quarterly cash dividend of $0.19 per share to be paid to shareholders of record at the close of business on March 11, 2025, payable on March 26, 2025. The Company also announced that Cathy Smith will be stepping down from her role as chief financial officer to become CFO of a publicly traded global food services company, effective following the filing of the Company's Annual Report on Form 10-K for the 2024 fiscal year, anticipated within the next month. The Company has initiated a comprehensive search for a new CFO with the assistance of a leading search firm. "We are grateful for Cathy's leadership over the past two years, which has been instrumental in strengthening our financial resilience and flexibility while maintaining our focus on providing customers with the best possible experiences. We wish her well in this next chapter," said Erik Nordstrom. "We are fortunate to have a strong financial leadership team to take on additional responsibilities and help ensure a smooth transition during our search." FOURTH QUARTER 2024 SUMMARY Total Company net sales in the fourth quarter decreased 2.1 percent, or increased 2.5 percent excluding the 53rd week in 2023, and comparable sales increased 4.7 percent compared with the same period in fiscal 2023. GMV decreased 0.2 percent in the fourth quarter and increased 3.1 percent in fiscal 2024 when compared with the same periods in 2023. Full-year revenue for fiscal 2024, including retail sales and credit card revenues, increased 2.2 percent, or increased 3.6 percent excluding the 53rd week, and full-year comparable sales increased 3.6 percent.2,3 Nordstrom banner net sales in the fourth quarter decreased 3.7 percent, or increased 0.5 percent excluding the 53rd week, and comparable sales increased 5.3 percent compared with the same period in fiscal 2023. GMV decreased 1.0 percent in the fourth quarter and increased 0.6 percent in fiscal 2024 when compared with the same periods in 2023. Full-year Nordstrom banner comparable sales increased 3.0 percent.2,3 Nordstrom Rack banner net sales in the fourth quarter increased 1.2 percent, or increased 6.6 percent excluding the 53rd week, and comparable sales increased 3.5 percent compared with the same period in fiscal 2023. Full-year Nordstrom Rack comparable sales increased 4.7 percent.2,3 Digital sales in the fourth quarter decreased 1.8 percent, or increased 2.6 percent excluding the 53rd week, compared with the same period in fiscal 2023. Digital sales represented 38 percent of total sales during the quarter and 36 percent of sales for the fiscal year.2 Gross profit, as a percentage of net sales, of 37.3 percent increased 290 basis points compared with the same period in fiscal 2023 primarily due to merchandise margin expansion related to timing of markdown recognition under the cost method of accounting, improved shrink and lower loyalty promotions. Ending inventory increased 11.4 percent compared with the same period in fiscal 2023, versus a net sales decrease of 2.1 percent, or increase of 2.5 percent excluding the 53rd week in 2023. The increase in inventory was driven primarily by growth in the top brands at both banners and higher in-transit inventory late in the quarter. Selling, general and administrative ("SG&A") expenses, as a percentage of net sales, of 34.4 percent increased 200 basis points compared with the same period in fiscal 2023, primarily due to higher labor costs, privatization fees and an accelerated technology depreciation charge. Excluding $18 million in privatization fees and a $13 million accelerated technology depreciation charge, adjusted SG&A expenses, as a percentage of net sales, were 33.7 percent. EBIT was $242 million in the fourth quarter of 2024, compared with $215 million during the same period in fiscal 2023. Adjusted EBIT of $273 million for the fourth quarter of 2024 excluded the privatization fees and accelerated technology depreciation. Adjusted EBIT of $247 million for the fourth quarter of 2023 excluded a supply chain asset impairment charge. EBIT was $495 million for fiscal 2024, and adjusted EBIT of $593 million excluded charges primarily related to supply chain impairment in the second quarter, accelerated technology depreciation in the third and fourth quarters, and privatization fees in the fourth quarter. EBIT margin and adjusted EBIT margin for the quarter were 5.8 percent and 6.5 percent of net sales, respectively. EBIT margin and adjusted EBIT margin for the fiscal year were 3.4 percent and 4.1 percent, respectively.1 Interest expense, net, of $22 million decreased from $26 million during the same period in fiscal 2023 primarily due to the redemption of $250 million of notes in the first quarter of 2024. Income tax expense during the fourth quarter was $55 million, or 24.9 percent of pretax earnings, compared with $55 million, or 29.1 percent of pretax earnings, in the same period of fiscal 2023. The decrease in the rate was primarily due to favorable state provision-to-return adjustments recorded in the fourth quarter of 2024, compared with the same quarter in fiscal 2023. The full-year income tax rate was 25.3 percent. The Company ended the year with $1.8 billion in available liquidity, including $1.0 billion in cash. DEFINITIVE AGREEMENT WITH NORDSTROM FAMILY AND EL PUERTO de LIVERPOOL, S.A.B. de C.V. In December 2024, Nordstrom, Inc. announced that it had reached an agreement with members of the Nordstrom family and El Puerto de Liverpool, S.A.B de C.V. ("Liverpool") to acquire all of the outstanding common shares of Nordstrom not already beneficially owned by the Nordstrom family and Liverpool. The transaction is expected to close in the first half of 2025, subject to certain conditions, including approval by shareholders. Upon completion, Nordstrom's common stock will no longer be listed on any public market. STORES UPDATE During fiscal 2024, the Company opened 23 stores: City Location Square Footage (000s) Timing of Opening Nordstrom Rack Pinole, CA Pinole Vista Crossing 23 March 7, 2024 Snellville, GA Presidential Markets 35 March 7, 2024 Kennesaw, GA Barrett Place 25 March 21, 2024 Macedonia, OH Macedonia Gateway 28 April 11, 2024 Gilroy, CA Gilroy Crossing 25 April 25, 2024 Jacksonville Beach, FL South Beach Regional 30 May 2, 2024 Queen Creek, AZ Queen Creek Marketplace 28 May 16, 2024 Elk Grove, CA The Ridge Elk Grove 25 May 30, 2024 Wheaton, IL Danada Square East 29 May 30, 2024 Oceanside, CA Pacific Coast Plaza 32 June 6, 2024 Bay Shore, NY Gardiner Manor Mall 24 June 13, 2024 San Antonio, TX Bandera Pointe 24 September 5, 2024 Franklin, TN Cool Springs Market 24 September 5, 2024 San Mateo, CA Bridgepointe Shopping Center 36 September 12, 2024 San Diego, CA Clairemont Town Square 25 September 19, 2024 Mooresville, NC Mooresville Crossing 28 September 26, 2024 Houston, TX Meyerland Plaza 34 September 26, 2024 Mason, OH Deerfield Towne Center 30 October 3, 2024 Raleigh, NC Triangle Town Place 32 October 10, 2024 Fort Myers, FL Bell Tower 31 October 17, 2024 Noblesville, IN Hamilton Town Center 25 October 17, 2024 Omaha, NE Village Pointe 30 October 24, 2024 Tarzana, CA Village Walk 25 November 1, 2024 The Company has also announced plans to open the following stores: City Location Square Footage (000s) Timing of Opening Nordstrom Rack Geneva, IL Randall Square 25 March 13, 2025 Houston, TX Westchase Shopping Center 30 March 20, 2025 Matthews, NC Sycamore Commons 25 March 27, 2025 Manalapan Township, NJ Manalapan Commons 26 March 27, 2025 Apple Valley, MN Fischer Marketplace 30 April 3, 2025 Morrisville, NC Park West Village 25 April 10, 2025 Nashua, NH Royal Ridge Center 30 April 24, 2025 Davis, CA The Davis Collection 25 May 22, 2025 Coral Springs, FL Pine Ridge Square 31 Fall 2025 Surprise, AZ Prasada North 26 Fall 2025 Holbrook, NY The Shops at SunVet 27 Fall 2025 Hyannis, MA The Landing at Hyannis 25 Fall 2025 Prosper, TX The Gates of Prosper 26 Fall 2025 Melbourne, FL The Avenue Viera 24 Fall 2025 Meridian, ID The Village at Meridian 25 Fall 2025 Lakeland, FL Lakeside Village 30 Fall 2025 Lubbock, TX West End Center 30 Fall 2025 Estero, FL Coconut Point 28 Fall 2025 Lake Grove, NY Smith Haven Plaza 25 Fall 2025 Longmont, CO Harvest Junction 28 Fall 2025 Sarasota, FL Sarasota Pavilion 27 Spring 2026 Catherine Bloom for Nordstrom Los Angeles, CA Melrose Place 4 Spring 2025 The Company had the following store counts as of quarter-end: February 1, 2025 February 3, 2024 Nordstrom Nordstrom 92 93 Nordstrom Local service hubs 6 6 Nordstrom Rack Nordstrom Rack 277 258 Last Chance clearance stores 2 2 Total 377 359 Gross store square footage 26,630,000 26,259,000 During the fourth quarter, the Company closed one Nordstrom store and three Nordstrom Rack stores. Subsequent to quarter-end, the Company closed one Nordstrom Local service hub, which will reopen as a storefront dedicated to personal styling. FISCAL YEAR 2025 OUTLOOK AND CONFERENCE CALL INFORMATION Given the pending transaction, the Company is not providing a fiscal 2025 financial outlook or hosting a fourth quarter 2024 conference call. ABOUT NORDSTROM At Nordstrom, Inc. (NYSE: JWN), we exist to help our customers feel good and look their best. Since starting as a shoe store in 1901, how to best serve customers has been at the center of every decision we make. This heritage of service is the foundation we're building on as we provide convenience and true connection for our customers. Our interconnected model enables us to serve customers when, where and how they want to shop – whether that's in-store at more than 350 Nordstrom, Nordstrom Local and Nordstrom Rack locations or digitally through our Nordstrom and Rack apps and websites. Through it all, we remain committed to leaving the world better than we found it. Certain statements in this earnings release contain or may suggest "forward-looking" information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risks and uncertainties that could cause results to be materially different from expectations. The words "will," "may," "designed to," "outlook," "believes," "should," "targets," "anticipates," "assumptions," "plans," "expects" or "expectations," "intends," "estimates," "forecasts," "guidance" and similar expressions identify certain of these forward-looking statements. The Company also may provide forward-looking statements in oral statements or other written materials released to the public. All statements contained or incorporated in this earnings release or in any other public statements that address such future events or expectations are forward-looking statements. Important factors that could cause actual results to differ materially from these forward-looking statements are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2024, our Form 10-Q for the fiscal quarter ended May 4, 2024, our Form 10-Q for the fiscal quarter ended August 3, 2024, our Form 10-Q for the fiscal quarter ended November 2, 2024 and our Form 10-K for the fiscal year ended February 1, 2025, anticipated to be filed with the SEC within the next month. In addition, forward-looking statements contained in this release may be impacted by the actual outcome of events or occurrences related to the Company's entry into an Agreement and Plan of Merger dated December 22, 2024, which, if consummated, would result in the Company ceasing to be a publicly traded corporation. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances. In addition, the actual timing, price, manner and amounts of future share repurchases, if any, will be subject to the discretion of our board of directors, contractual commitments, market and economic conditions and applicable Securities and Exchange Commission rules. This earnings release includes references to websites, website addresses and additional materials, including reports and blogs, found on those websites. The content of any websites and materials named, hyperlinked or otherwise referenced in this earnings release are not incorporated by reference into this earnings release or in any other report or document we file with the SEC, and any references to such websites and materials are intended to be inactive textual references only. The information on those websites is not part of this earnings release. 1 Adjusted EBIT and adjusted EPS are non-GAAP financial measures. Refer to the "Adjusted EBIT, Adjusted EBITDA, Adjusted EBIT Margin and Adjusted EPS" section of this release for additional information as well as reconciliations between the Company's GAAP and non-GAAP financial results.2 Fourth quarter 2024 net sales growth and GMV growth are calculated versus the 14-week period ended February 3, 2024, and full-year growth is calculated versus the 53-week period ended February 3, 2024.3 Fourth quarter 2024 comparable sales growth is calculated versus the realigned 13-week period ended February 3, 2024, and full-year growth is calculated versus the realigned 52-week period ended February 3, 2024. NORDSTROM, INC. CONSOLIDATED STATEMENTS OF EARNINGS (unaudited; amounts in millions, except per share amounts) Quarter Ended Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Net sales $4,204 $4,293 $14,557 $14,219 Credit card revenues, net 119 127 459 474 Total revenues 4,323 4,420 15,016 14,693 Cost of sales and related buying and occupancy costs (2,636) (2,815) (9,396) (9,303) Selling, general and administrative expenses (1,445) (1,390) (5,125) (4,855) Canada wind-down costs — — — (284) Earnings before interest and income taxes 242 215 495 251 Interest expense, net (22) (26) (102) (104) Earnings before income taxes 220 189 393 147 Income tax expense (55) (55) (99) (13) Net earnings $165 $134 $294 $134 Earnings per share: Basic $1.00 $0.83 $1.79 $0.83 Diluted $0.97 $0.82 $1.74 $0.82 Weighted-average shares outstanding: Basic 165.1 162.5 164.3 161.8 Diluted 171.0 164.6 168.9 163.4 Percent of net sales: Gross profit 37.3 % 34.4 % 35.5 % 34.6 % Selling, general and administrative expenses 34.4 % 32.4 % 35.2 % 34.2 % Earnings before interest and income taxes 5.8 % 5.0 % 3.4 % 1.8 % NORDSTROM, INC. CONSOLIDATED BALANCE SHEETS (unaudited; amounts in millions) February 1, 2025 February 3, 2024 Assets Current assets: Cash and cash equivalents $1,035 $628 Accounts receivable, net 245 334 Merchandise inventories 2,104 1,888 Prepaid expenses and other current assets 305 286 Total current assets 3,689 3,136 Land, property and equipment (net of accumulated depreciation of $8,747 and $8,251) 3,039 3,177 Operating lease right-of-use assets 1,419 1,359 Goodwill 249 249 Other assets 570 523 Total assets $8,966 $8,444 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $1,288 $1,236 Accrued salaries, wages and related benefits 424 244 Current portion of operating lease liabilities 244 240 Other current liabilities 1,132 1,102 Current portion of long-term debt — 250 Total current liabilities 3,088 3,072 Long-term debt, net 2,618 2,612 Noncurrent operating lease liabilities 1,421 1,377 Other liabilities 699 535 Commitments and contingencies Shareholders' equity: Common stock, no par value: 1,000 shares authorized; 165.2 and 162.4 shares issued and outstanding 3,496 3,418 Accumulated deficit (2,369) (2,578) Accumulated other comprehensive gain 13 8 Total shareholders' equity 1,140 848 Total liabilities and shareholders' equity $8,966 $8,444 NORDSTROM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; amounts in millions) Year Ended February 1, 2025 February 3, 2024 Operating Activities Net earnings $294 $134 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization expenses 603 586 Canada wind-down costs — 207 Asset impairment 51 30 Right-of-use asset amortization 187 184 Deferred income taxes, net (100) (60) Stock-based compensation expense 72 52 Other, net (25) (71) Change in operating assets and liabilities: Accounts receivables, net 78 (53) Merchandise inventories (115) (61) Prepaid expenses and other assets 19 14 Accounts payable (16) 40 Accrued salaries, wages and related benefits 180 (42) Other current liabilities 73 (73) Lease liabilities (266) (272) Other liabilities 232 6 Net cash provided by operating activities 1,267 621 Investing Activities Capital expenditures (516) (569) Decrease in cash and cash equivalents resulting from Canada deconsolidation — (33) Proceeds from the sale of assets and other, net 28 31 Net cash used in investing activities (488) (571) Financing Activities Principal payments on long-term debt (250) — Change in cash book overdrafts (4) 2 Cash dividends paid (124) (123) Payments for repurchase of common stock — (1) Proceeds from issuances under stock compensation plans 20 20 Other, net (14) (7) Net cash used in financing activities (372) (109) Net increase (decrease) in cash and cash equivalents 407 (59) Cash and cash equivalents at beginning of year 628 687 Cash and cash equivalents at end of year $1,035 $628 NORDSTROM, INC. ADJUSTED EBIT, ADJUSTED EBITDA, ADJUSTED EBIT MARGIN AND ADJUSTED EPS (NON-GAAP FINANCIAL MEASURES) (unaudited; amounts in millions, except per share amounts) The following are key financial metrics and, when used in conjunction with GAAP measures, we believe they provide useful information for evaluating our core business performance, enable comparison of financial results across periods and allow for greater transparency with respect to key metrics used by management for financial and operational decision-making. Adjusted EBIT, adjusted EBITDA, adjusted EBIT margin and adjusted EPS exclude certain items that we do not consider representative of our core operating performance. The financial measure calculated under GAAP which is most directly comparable to adjusted EBIT and adjusted EBITDA is net earnings. The financial measure calculated under GAAP which is most directly comparable to adjusted EBIT margin is net earnings as a percent of net sales. The financial measure calculated under GAAP which is most directly comparable to adjusted EPS is diluted EPS. Adjusted EBIT, adjusted EBITDA, adjusted EBIT margin and adjusted EPS are not measures of financial performance under GAAP and should be considered in addition to, and not as a substitute for, net earnings, net earnings as a percent of net sales, operating cash flows, earnings per share, earnings per diluted share or other financial measures performed in accordance with GAAP. Our method of determining non-GAAP financial measures may differ from other companies' financial measures and therefore may not be comparable to methods used by other companies. The following is a reconciliation of net earnings to adjusted EBIT and adjusted EBITDA and net earnings as a percent of net sales to adjusted EBIT margin: Quarter Ended Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Net earnings $165 $134 $294 $134 Income tax expense 55 55 99 13 Interest expense, net 22 26 102 104 Earnings before interest and income taxes 242 215 495 251 Privatization fees1 18 — 18 — Accelerated technology depreciation2 13 — 26 — Supply chain asset impairment and other — 32 54 32 Canada wind-down costs — — — 284 Adjusted EBIT 273 247 593 567 Depreciation and amortization expenses 123 156 573 586 Amortization of developer reimbursements (14) (17) (57) (69) Adjusted EBITDA $382 $386 $1,109 $1,084 Net sales $4,204 $4,293 $14,557 $14,219 Net earnings as a % of net sales 3.9 % 3.1 % 2.0 % 0.9 % EBIT margin 5.8 % 5.0 % 3.4 % 1.8 % Adjusted EBIT margin 6.5 % 5.7 % 4.1 % 4.0 % 1 Privatization fees include transaction-related expenses incurred in connection with the pending merger transaction. These fees are included in SG&A expense on the Consolidated Statement of Earnings. 2 As a result of a strategic decision, we recognized a charge related to incremental accelerated depreciation for a technology asset. The charge is included in SG&A expense on the Consolidated Statement of Earnings and depreciation and amortization expenses on the Consolidated Statement of Cash Flows. The following is a reconciliation of diluted EPS to adjusted EPS: Quarter Ended Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Diluted EPS $0.97 $0.82 $1.74 $0.82 Privatization fees 0.11 — 0.11 — Accelerated technology depreciation 0.07 — 0.16 — Supply chain asset impairment and other — 0.19 0.32 0.19 Canada wind-down costs — — — 1.74 Income tax impact on adjustments1 (0.05) (0.05) (0.16) (0.63) Adjusted EPS $1.10 $0.96 $2.17 $2.12 1 The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate for the respective non-GAAP adjustment. NORDSTROM, INC. SUMMARY OF NET SALES (unaudited; amounts in millions) Our Nordstrom brand includes Nordstrom.com, Nordstrom U.S. stores and Nordstrom Local. Nordstrom also included Canada operations prior to March 2, 2023, inclusive of Nordstrom.ca, Nordstrom Canadian stores and Nordstrom Rack Canadian stores, and ASOS | Nordstrom prior to December 2023. Our Nordstrom Rack brand includes NordstromRack.com, Nordstrom Rack U.S. stores and Last Chance clearance stores. The following table summarizes net sales for the quarter and year ended February 1, 2025, compared with the quarter and year ended February 3, 2024: Quarter Ended Year Ended February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 Net sales: Nordstrom $2,759 $2,866 $9,390 $9,436 Nordstrom Rack 1,445 1,427 5,167 4,783 Total net sales $4,204 $4,293 $14,557 $14,219 Net sales (decrease) increase: Nordstrom (3.7 %) (3.0 %) (0.5 %) (8.2 %) Nordstrom Rack 1.2 % 14.6 % 8.0 % (0.6 %) Total Company (2.1 %) 2.2 % 2.4 % (5.8 %) Digital sales as % of total net sales1 38 % 38 % 36 % 36 % 1 Sales conducted through a digital platform such as our websites or mobile apps. Digital sales may be self-guided by the customer, as in a traditional online order, or facilitated by a salesperson using a virtual styling or selling tool. Digital sales may be delivered to the customer or picked up in our Nordstrom stores, Nordstrom Rack stores or Nordstrom Local service hubs. Digital sales also includes a reserve for estimated returns. NORDSTROM, INC. ADJUSTED RETURN ON INVESTED CAPITAL ("ADJUSTED ROIC") (NON-GAAP FINANCIAL MEASURE) (unaudited; amounts in millions) We believe that Adjusted ROIC is a useful financial measure for investors in evaluating the efficiency and effectiveness of the capital we have invested in our business to generate returns over time. Our Adjusted ROIC calculation excludes certain items that we do not consider representative of our core operating performance. Adjusted ROIC is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for, return on assets, net earnings, total assets or other GAAP financial measures. Our method of calculating a non-GAAP financial measure may differ from other companies' methods and therefore may not be comparable to those used by other companies. The financial measure calculated under GAAP which is most directly comparable to Adjusted ROIC is return on assets. The following shows the components to reconcile the return on assets calculation to Adjusted ROIC: Four Quarters Ended February 1, 2025 February 3, 2024 Net earnings $294 $134 Income tax expense 99 13 Interest expense 135 137 Earnings before interest and income tax expense 528 284 Operating lease interest1 92 86 Non-operating related adjustments2 98 316 Adjusted net operating profit 718 686 Adjusted estimated income tax expense3 (183) (172) Adjusted net operating profit after tax $535 $514 Average total assets $8,770 $8,766 Average noncurrent deferred property incentives in excess of operating lease right-of-use (ROU) assets4 (120) (157) Average non-interest bearing current liabilities (2,915) (2,954) Non-operating related adjustments5 40 394 Adjusted average invested capital $5,775 $6,049 Return on assets 3.3 % 1.5 % Adjusted ROIC 9.3 % 8.5 % 1 Operating lease interest is a component of operating lease cost recorded in occupancy costs. We add back operating lease interest for purposes of calculating adjusted net operating profit for consistency with the treatment of interest expense on our debt. 2 See the Adjusted EBIT and Adjusted EBITDA section, as well as our 2023 Annual Report, for detailed information on certain non-operating related adjustments. 3 Adjusted estimated income tax expense is calculated by multiplying the adjusted net operating profit by the adjusted effective tax rate (which removes the impact of non-operating related adjustments) for the trailing twelve-month periods ended February 1, 2025 and February 3, 2024. The adjusted effective tax rate is calculated by dividing adjusted income tax expense by adjusted earnings before income taxes for the same trailing twelve-month periods. 4 For leases with property incentives that exceed the ROU assets, we reclassify the amount from assets to other current liabilities and other liabilities on the Consolidated Balance Sheets. The current and noncurrent amounts are used to reduce average total assets above, as this better reflects how we manage our business. 5 Non-operating related adjustments primarily included supply chain impairment charges and accelerated technology depreciation for the trailing twelve-month period ended February 1, 2025 and the wind-down of our Canadian operations for the trailing twelve-month period ended February 3, 2024. NORDSTROM, INC. ADJUSTED DEBT TO EBITDAR (NON-GAAP FINANCIAL MEASURE) (unaudited; dollars in millions) Adjusted debt to earnings before interest, income taxes, depreciation, amortization and rent ("EBITDAR") is one of our key financial metrics and we believe that our debt levels are best analyzed using this measure, as it provides a reflection of our creditworthiness which could impact our credit ratings and borrowing costs. This metric is calculated in accordance with our Revolver covenant and is a key component in assessing whether our revolving credit facility is secured or unsecured, as well as our ability to make dividend payments and share repurchases. Adjusted debt to EBITDAR is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for, debt to net earnings, net earnings, debt or other GAAP financial measures. Our method of calculating a non-GAAP financial measure may differ from other companies' methods and therefore may not be comparable to those used by other companies. The financial measure calculated under GAAP which is most directly comparable to Adjusted debt to EBITDAR is debt to net earnings. The following shows the components to reconcile the debt to net earnings calculation to Adjusted debt to EBITDAR: February 1, 2025 Debt $2,618 Operating lease liabilities 1,665 Adjusted debt $4,283 Four Quarters Ended February 1, 2025 Net earnings $294 Income tax expense 99 Interest expense, net 102 Earnings before interest and income taxes 495 Depreciation and amortization expenses 573 Operating lease cost1 291 Amortization of developer reimbursements2 57 Other Revolver covenant adjustments3 125 Adjusted EBITDAR $1,541 Debt to Net Earnings 8.9 Adjusted debt to EBITDAR 2.8 1 Operating lease cost is fixed rent expense, including fixed common area maintenance expense, net of developer reimbursement amortization. 2 Amortization of developer reimbursements is a non-cash reduction of operating lease cost and is therefore added back to operating lease cost for purposes of our Revolver covenant calculation. 3 Other adjusting items to reconcile net earnings to Adjusted EBITDAR as defined by our Revolver covenant include interest income, certain non-cash charges and other gains and losses where relevant. For the four quarters ended February 1, 2025, other Revolver covenant adjustments primarily included supply chain impairment charges, interest income and accelerated technology depreciation. See the Adjusted EBIT and Adjusted EBITDA section for detailed information on certain non-operating related adjustments. NORDSTROM, INC. FREE CASH FLOW (NON-GAAP FINANCIAL MEASURE) (unaudited; amounts in millions) Free Cash Flow is one of our key liquidity measures and, when used in conjunction with GAAP measures, we believe it provides investors with a meaningful analysis of our ability to generate cash from our business. Free Cash Flow is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for, operating cash flows or other financial measures prepared in accordance with GAAP. Our method of calculating a non-GAAP financial measure may differ from other companies' methods and therefore may not be comparable to those used by other companies. The financial measure calculated under GAAP which is most directly comparable to Free Cash Flow is net cash provided by operating activities. The following is a reconciliation of net cash provided by operating activities to Free Cash Flow: Year Ended February 1, 2025 February 3, 2024 Net cash provided by operating activities $1,267 $621 Capital expenditures (516) (569) Change in cash book overdrafts (4) 2 Free Cash Flow $747 $54 SOURCE Nordstrom, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Nordstrom Reports Fourth Quarter 2024 Earnings

FAQ

Why Bullish?

How important is it?

Why Short Term?

Related Companies

Related News