\NORDSTROM, INC.
1. Based on the information in the company's most recent annual report, determine each of the following:
a. Gross profit for each year reported.
b. Gross profit rate (Gross profit / Sales) for each year reported. Round to one decimal place.
c. Operating income for each year reported.
d. Percentage change in operating income for the most recent year. Round to one decimal place.
e. Net income for each year reported.
f. Percentage change in net income for the most recent year. Round to one decimal place.
2. Based solely on your responses to Item 1, has the company's performance improved, remained constant, or deteriorated over the periods presented? Briefly explain your answer.
Item 6. Selected Financial Data. (Dollars in millions except per square foot and per share amounts) The following selected financial data are derived from the audited Consolidated Financial Statements and should be read in conjunction with Item 1A: Risk Factors, Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 8: Financial Statements and Supplementary Data of this Annual Report on Form 10-K. Fiscal year 2018 2017 2016 2015 2014 Earnings Results $15,480 $15,137 $14,498 $14,095 $13,110 Credit card revenues, net 380 341 259 342 396 Gross profit 5,325 5,247 5,058 4,927 4,704 Selling, general and administrative ("SG&A") expenses (4,868) (4,662) (4,315) (4.168) (3,777) Earnings before interest and income taxes ("EBIT") 837 926 805 1,101 1,323 Net earnings 564 437 354 600 720 Net sales Balance Sheet and Cash Flow Data Cash and cash equivalents Merchandise inventories Land, property and equipment, net Total assets Total long-term debt Net cash provided by operating activities Capital expenditures $957 1,978 3,921 7,886 2,685 1,296 654 $1,181 2,027 3,939 8,115 $1,007 1,896 3,897 7,858 2,774 1,658 846 $595 1,945 3,735 7,698 2,805 2,470 1,082 $827 1,733 3,340 9,245 3,131 1,243 861 2,737 1,400 731 Performance Metrics Net sales increase Comparable sales increase (decrease) Digital sales as % of net sales Gross profit % of net sales SG&A % of net sales EBIT % of net sales Capital expenditures % of net sales Return on assets Adjusted return on invested capital ("Adjusted ROIC")5 Inventory turnover rate 2.3% 1.7% 30.0% 34.4% 31.5% 5.4% 4.2% 6.8% 12.0% 4.70 4.4% 0.8% 27.0% 34.7% 30.8% 6.1% 4.8% 5.4% 9.7% 4.67 2.9% (0.4%) 24.0% 34.9% 29.8% 5.6% 5.8% 4.5% 8.4% 4.53 7.5% 2.7% 21.0% 35.0% 29.6% 7.8% 7.7% 6.6% 10.7% 4.54 7.8% 4.0% 18.0% 35.9% 28.8% 10.1% 6.6% 8.1% 12.6% 4.67 Per Share Information Earnings per diluted share26 $3.32 $2.59 $2.02 $3.15 $3.72 Dividends declared per share! 1.48 1.48 1.48 6.33 1.32 Amounts were impacted by the October 1, 2015, credit card receivable transaction. As a result of the transaction, the dividends paid in 2015 included a special cash dividend of $4.85 per share. For further information regarding these impacts, see Note 3: Credit Card Receivable Transaction and Note 12: Shareholders' Equity in Item 8. 2 Results for 2018 include the Estimated Non-recurring Charge of $72, or $0.28 per diluted share, see Note 1: Nature of Operations and Summary of Significant Accounting Policies in Item 8. The 53rd week is not included in comparable sales calculations. For the definition of comparable sales, see Results of Operations in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations. Digital sales are online sales and digitally assisted store sales which include Buy Online, Pick Up in Store (BOPUS"), Ship to Store, Reserve Online, Try in Store (Store Reserve) and Style Board, a digital selling tool. 5 See Adjusted ROIC (non-GAAP financial measure) in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations additional information and reconciliation to the most directly comparable GAAP financial measure. Earnings per diluted share included the impact of the Trunk Club goodwill impairment charge of $1.12 per share in 2016. Nordstrom, Inc, and subsidiaries 19 Table of Contents Nordstrom, Inc. Notes to Consolidated Financial Statements (Dollar and share amounts in millions except per share, per option and per unit amounts) NOTE 17: SELECTED QUARTERLY DATA (UNAUDITED) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Fiscal year 2019 Net sales Credit card revenues, net Gross profit SG&A expenses EBIT ? Net earnings Earnings per basic share Earnings per diluted share? Dividends per share $3,349 94 1,121 (1,138) 77 $3,778 94 1,302 (1,180) 216 $3,566 106 1,222 (1,135) 193 $4,439 99 1,555 (1,355) 299 $15,132 392 5,200 (4,808) 784 496 126 193 $3.20 37 $0.24 $0.23 $0.37 141 $0.91 $0.90 $0.37 $0.81 $0.81 $0.37 $1.24 $1.23 $0.37 $3.18 $1.48 Fiscal year 2018 Net sales $3,469 $3,980 $3,648 $4,383 $15,480 Credit card revenues, net 92 87 100 101 380 Gross profit 1,181 1,391 1.213 1,540 5,325 SG&A expenses (1,120) (1,232) (1,208) (1,308) (4,868) EBIT 153 246 105 333 837 Net earnings 87 162 67 248 564 Earnings per basic share $0.52 $0.97 $0.40 $1.50 $3.37 Earnings per diluted share $0.51 $0.95 $0.39 $1.48 $3.32 Dividends per share $0.37 $0.37 $0.37 $0.37 $1.48 Quarterly totals may not foot across due to rounding- 2 In the fourth quarter of 2019, we incurred charges related to the integration of Trunk Club and debt refinancing costs, which reduced net earnings by $29, or $0.19 per diluted share. The integration charges reduced earnings before interest and income taxes by $32 and debt refinancing costs increased interest expense by $8. Results in the third quarter of 2018 include the Estimated Non-recurring Charge of $72, or $49 net of tax, and $0.28 per diluted share (see Note 1: Nature of Operations and Summary of Significant Accounting Policies). Nordstrom, Inc. and subsidiaries 63
