Nordstrom, Inc. Annual Report 2007
ANNUAL REPORT 2007
Nordstrom, Inc. Annual Report
0 207
DAR e
customers, employees and shareholders,
On behalf of everyone at Nordstrom, I am pleased to share with you our company’s 2007 performance and outlook for 2008 and beyond. Overall, we realized a number of top performances in 2007, thanks to the hard work of more than 55,000 Nordstrom employees. Let’s review the highlights: • Total sales increased 3.1% to a record high $8.8 billion and comparable sales increased 3.9% — our sixth consecutive year of same-store sales gains. • Improving store productivity resulted in a return on investment (ROIC) of 19.4%, and sales of $402 per square foot on a 52-week basis, our best performance ever. • Our SG&A rate (expenses as a percentage of net sales) improved for the seventh year in a row at 26.7%, improving by 9 basis points over last year. • Earnings Before Interest and Taxes (EBIT) were $1.247 billion this year, an improvement of 8.5% over last year. In total, 2007 was a year of good performance for our company. But 2007 was really a tale of two halves. In the first half, the industry was robust, our team executed well, and we experienced comparable store growth of 7.5%. Around mid-year, the market slowed dramatically and our comparable store sales growth was only 0.5%. While we managed our operating expenses well throughout the year, inventories increased in the third and fourth quarters, at about the same time the economy began to slow and sales softened. We addressed the inventory issues quickly and corrected many of them by the beginning of 2008. Thus, we believe we are positioned to perform well in what we expect to be a continued soft retail environment in 2008. Our focus remains on growing market share with our core customers. When we challenge ourselves to offer the best service and merchandise, we give the customer a reason to buy. We have one of the fastest inventory turns among our direct competitors and when we continue to flow in new
Nordstrom, Inc. Annual Report
0 207
DAR e
customers, employees and shareholders,
On behalf of everyone at Nordstrom, I am pleased to share with you our company’s 2007 performance and outlook for 2008 and beyond. Overall, we realized a number of top performances in 2007, thanks to the hard work of more than 55,000 Nordstrom employees. Let’s review the highlights: • Total sales increased 3.1% to a record high $8.8 billion and comparable sales increased 3.9% — our sixth consecutive year of same-store sales gains. • Improving store productivity resulted in a return on investment (ROIC) of 19.4%, and sales of $402 per square foot on a 52-week basis, our best performance ever. • Our SG&A rate (expenses as a percentage of net sales) improved for the seventh year in a row at 26.7%, improving by 9 basis points over last year. • Earnings Before Interest and Taxes (EBIT) were $1.247 billion this year, an improvement of 8.5% over last year. In total, 2007 was a year of good performance for our company. But 2007 was really a tale of two halves. In the first half, the industry was robust, our team executed well, and we experienced comparable store growth of 7.5%. Around mid-year, the market slowed dramatically and our comparable store sales growth was only 0.5%. While we managed our operating expenses well throughout the year, inventories increased in the third and fourth quarters, at about the same time the economy began to slow and sales softened. We addressed the inventory issues quickly and corrected many of them by the beginning of 2008. Thus, we believe we are positioned to perform well in what we expect to be a continued soft retail environment in 2008. Our focus remains on growing market share with our core customers. When we challenge ourselves to offer the best service and merchandise, we give the customer a reason to buy. We have one of the fastest inventory turns among our direct competitors and when we continue to flow in new
References: Dollar and share amounts in millions except per share and per option amounts The following table summarizes the restricted trade receivables: February 2, 2008 $630 1,130 $1,760 February 3, 2007 $582 — $582 February 3, 2007 Total face value of co-branded Nordstrom VISA credit card principal receivables Securities issued by the VISA Trust: Off-balance sheet (sold to third parties): 2002 Class A & B Notes 2004-2 Variable funding notes $908 $200 350 $550