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SEATTLE, May 31, 2023 /PRNewswire/ -- Nordstrom, Inc. (NYSE: JWN) today reported a first quarter net loss of $205 million and loss per diluted share of $1.27. Excluding charges related to the wind-down of Canadian operations, the Company reported adjusted earnings per diluted share ("EPS") of $0.07.1
For the first quarter ended April 29, 2023, net sales decreased 11.6 percent versus the same period in fiscal 2022, including a 175 basis point negative impact from the wind-down of Canadian operations, and gross merchandise value ("GMV") decreased 11.9 percent. Nordstrom banner net sales decreased 11.4 percent and GMV decreased 11.8 percent. Net sales for Nordstrom Rack decreased 11.9 percent.
The Company's first quarter results reflected progress on its key priorities. Nordstrom Rack sales trends improved late in the quarter, with the strongest performance in April, primarily driven by increased penetration of strategic brands in its merchandise mix. Gross profit margin expanded by 110 basis points over last year, reflecting the Company's focus on increasing inventory productivity. In addition, the Company continued to deliver efficiencies through its supply chain initiatives, which contributed over 100 basis points of improvement in variable costs within selling, general and administrative ("SG&A") expenses, helping to mitigate the impact of deleverage on lower sales.
"We are pleased with the progress we're making against the key priorities we laid out for 2023 as we continue to enhance our overall customer experience, improve Nordstrom Rack performance, increase inventory productivity and optimize our supply chain operations," said Erik Nordstrom, chief executive officer of Nordstrom, Inc. "We're encouraged by our momentum, especially given the uncertain macroeconomic environment. We remain focused on executing with agility and delivering long-term value to our shareholders."
Most categories in the U.S. were down in the first quarter versus 2022, which benefited from strong pent-up demand for a return to occasions after the pandemic. Active was the strongest category, while beauty and men's apparel performed above average.
As previously announced, on May 17, 2023 the board of directors declared a quarterly cash dividend of $0.19 per share, payable on June 14, 2023, to shareholders of record at the close of business on May 30, 2023.
FIRST QUARTER 2023 SUMMARY
STORES UPDATE
During and subsequent to the first quarter of 2023, the Company opened or relocated eight stores:
City | Location | Square Footage (000s) | Timing of | |||
Nordstrom Rack | ||||||
Los Angeles, CA | NOHO West | 26 | April 13, 2023 | |||
Clovis, CA | Clovis Crossing | 31 | April 13, 2023 | |||
Delray Beach, FL | Delray Place | 26 | May 11, 2023 | |||
Chattanooga, TN | The Terrace at Hamilton Place | 24 | May 18, 2023 | |||
Las Vegas, NV | Best in the West | 31 | May 18, 2023 | |||
Birmingham, AL | The Summit (relocation from River Ridge) | 27 | May 25, 2023 | |||
Wichita, KS | Bradley Fair | 28 | May 25, 2023 | |||
San Clemente, CA | San Clemente Plaza | 32 | May 25, 2023 |
The Company has also announced plans to open the following stores:
City | Location | Square Footage (000s) | Timing of | |||
Nordstrom Rack | ||||||
Union Gap, WA | Valley Mall | 28 | Fall 2023 | |||
Olympia, WA | Cooper Point Marketplace | 32 | Fall 2023 | |||
Salem, OR | Willamette Town Center | 25 | Fall 2023 | |||
Anaheim Hills, CA | Anaheim Hills Festival | 24 | Fall 2023 | |||
Overland Park, KS | Overland Crossing | 27 | Fall 2023 | |||
San Luis Obispo, CA | SLO Promenade | 24 | Fall 2023 | |||
Allen, TX | The Village at Allen | 29 | Fall 2023 | |||
Visalia, CA | Sequoia Mall | 29 | Fall 2023 | |||
Pinole, CA | Pinole Vista Crossing | 23 | Fall 2023 | |||
Denton, TX | Denton Crossing | 25 | Fall 2023 | |||
Aurora, CO | Southlands | 30 | Fall 2023 | |||
Natomas, CA | The Promenade at Sacramento Gateway | 26 | Fall 2023 | |||
San Antonio, TX | Northwoods | 35 | Fall 2023 | |||
Kennesaw, GA | Barrett Place | 25 | Spring 2024 | |||
Elk Grove, CA | The Ridge Elk Grove | 25 | Spring 2024 | |||
Gilroy, CA | Gilroy Crossing | 25 | Spring 2024 | |||
Oceanside, CA | Pacific Coast Plaza | 31 | Spring 2024 | |||
Wheaton, IL | Danada Square East | 29 | Spring 2024 | |||
Snellville, GA | Presidential Markets | 35 | Spring 2024 | |||
Macedonia, OH | Macedonia Gateway | 28 | Spring 2024 | |||
Jacksonville Beach, FL | South Beach Regional | 30 | Spring 2024 | |||
San Mateo, CA | Bridgepointe Shopping Center | 36 | Fall 2024 | |||
Davis, CA | The Davis Collection | 25 | Spring 2025 |
The Company had the following store counts as of quarter-end:
April 29, 2023 | April 30, 2022 | ||
Nordstrom | |||
Nordstrom – U.S. | 94 | 94 | |
Nordstrom – Canada | — | 6 | |
Nordstrom Local service hubs | 7 | 7 | |
ASOS | Nordstrom | 1 | — | |
Nordstrom Rack | |||
Nordstrom Rack – U.S. | 243 | 240 | |
Nordstrom Rack – Canada | — | 7 | |
Last Chance clearance stores | 2 | 2 | |
Total | 347 | 356 | |
Gross store square footage | 26,259,000 | 27,555,000 |
As of the first quarter of 2023, the Company removed the six Nordstrom stores and seven Nordstrom Rack stores in Canada from the table above as operations are being wound down.
FISCAL YEAR 2023 OUTLOOK
The Company reaffirmed its revenue and adjusted financial outlook for fiscal 2023, which includes a 53rd week and now reflects the estimated charges from the wind-down of Canadian operations and related tax impacts recorded in the first quarter:
CONFERENCE CALL INFORMATION
The Company's senior management will host a conference call to provide a business update and to discuss first quarter 2023 financial results and fiscal 2023 outlook at 4:45 p.m. EDT today. To listen to the live call online and view the speakers' prepared remarks and the conference call slides, visit the Investor Relations section of the Company's corporate website at investor.nordstrom.com. An archived webcast with the speakers' prepared remarks and the conference call slides will be available in the Quarterly Results section for one year. Interested parties may also dial 201-689-8354. A telephone replay will be available beginning approximately three hours after the conclusion of the call by dialing 877-660-6853 or 201-612-7415 and entering Conference ID 13738446, until the close of business on June 7, 2023.
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 digital-first platform 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 press 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 press 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 January 28, 2023, and our Form 10-Q for the fiscal quarter ended April 29, 2023, to be filed with the SEC on or about June 7, 2023. In addition, forward-looking statements contained in this release may be impacted by the actual outcome of events or occurrences related to the wind-down of business operations in Canada. 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.
_______________________________ | |
1 | Adjusted EPS is a non-GAAP financial measure. 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 | Nordstrom Canada is comprised of Nordstrom Canada Retail, Inc., Nordstrom Canada Holdings, LLC and Nordstrom Canada Holdings II, LLC. |
3 | Adjusted EBIT is a non-GAAP financial measure. 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. |
4 | Adjusted EBIT margin and adjusted EPS are non-GAAP financial measures. Refer to the "Forward-Looking Non-GAAP Measures" section of this release for additional information as well as reconciliations between the Company's GAAP and non-GAAP financial expectations. |
NORDSTROM, INC. | |||
Quarter Ended | |||
April 29, 2023 | April 30, 2022 | ||
Net sales | $3,064 | $3,467 | |
Credit card revenues, net | 117 | 102 | |
Total revenues | 3,181 | 3,569 | |
Cost of sales and related buying and occupancy costs | (2,028) | (2,331) | |
Selling, general and administrative expenses | (1,103) | (1,165) | |
Canada wind-down costs | (309) | — | |
(Loss) earnings before interest and income taxes | (259) | 73 | |
Interest expense, net | (28) | (35) | |
(Loss) earnings before income taxes | (287) | 38 | |
Income tax benefit (expense) | 82 | (18) | |
Net (loss) earnings | ($205) | $20 | |
(Loss) earnings per share: | |||
Basic | ($1.27) | $0.13 | |
Diluted | ($1.27) | $0.13 | |
Weighted-average shares outstanding: | |||
Basic | 160.8 | 160.1 | |
Diluted | 160.8 | 162.9 | |
Percent of net sales: | |||
Gross profit | 33.8 % | 32.8 % | |
Selling, general and administrative expenses | 36.0 % | 33.6 % | |
(Loss) earnings before interest and income taxes | (8.5 %) | 2.1 % |
NORDSTROM, INC. | |||||
April 29, 2023 | January 28, 2023 | April 30, 2022 | |||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $581 | $687 | $484 | ||
Accounts receivable, net | 279 | 265 | 297 | ||
Merchandise inventories | 2,237 | 1,941 | 2,426 | ||
Prepaid expenses and other current assets | 414 | 316 | 332 | ||
Total current assets | 3,511 | 3,209 | 3,539 | ||
Land, property and equipment (net of accumulated depreciation of | 3,197 | 3,351 | 3,505 | ||
Operating lease right-of-use assets | 1,393 | 1,470 | 1,497 | ||
Goodwill | 249 | 249 | 249 | ||
Other assets | 478 | 466 | 384 | ||
Total assets | $8,828 | $8,745 | $9,174 | ||
Liabilities and Shareholders' Equity | |||||
Current liabilities: | |||||
Accounts payable | 1,674 | 1,238 | 1,898 | ||
Accrued salaries, wages and related benefits | 246 | 291 | 241 | ||
Current portion of operating lease liabilities | 249 | 258 | 250 | ||
Other current liabilities | 1,236 | 1,203 | 1,198 | ||
Current portion of long-term debt | 249 | — | — | ||
Total current liabilities | 3,654 | 2,990 | 3,587 | ||
Long-term debt, net | 2,608 | 2,856 | 2,854 | ||
Non-current operating lease liabilities | 1,406 | 1,526 | 1,566 | ||
Other liabilities | 609 | 634 | 578 | ||
Commitments and contingencies | |||||
Shareholders' equity: | |||||
Common stock, no par value: 1,000 shares authorized; 161.4, | 3,372 | 3,353 | 3,301 | ||
Accumulated deficit | (2,824) | (2,588) | (2,662) | ||
Accumulated other comprehensive gain (loss) | 3 | (26) | (50) | ||
Total shareholders' equity | 551 | 739 | 589 | ||
Total liabilities and shareholders' equity | $8,828 | $8,745 | $9,174 |
NORDSTROM, INC. | |||
Quarter Ended | |||
April 29, 2023 | April 30, 2022 | ||
Operating Activities | |||
Net (loss) earnings | ($205) | $20 | |
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: | |||
Depreciation and amortization expenses | 144 | 152 | |
Canada wind-down costs | 220 | — | |
Right-of-use asset amortization | 43 | 47 | |
Deferred income taxes, net | (16) | (13) | |
Stock-based compensation expense | 14 | 19 | |
Other, net | (25) | (45) | |
Change in operating assets and liabilities: | |||
Merchandise inventories | (296) | (19) | |
Other current and noncurrent assets | (112) | (42) | |
Accounts payable | 301 | 233 | |
Accrued salaries, wages and related benefits | (39) | (143) | |
Lease liabilities | (67) | (65) | |
Other current and noncurrent liabilities | 54 | 43 | |
Net cash provided by operating activities | 16 | 187 | |
Investing Activities | |||
Capital expenditures | (106) | (96) | |
Decrease in cash and cash equivalents resulting from Canada deconsolidation | (33) | — | |
Proceeds from the sale of assets and other, net | 16 | 85 | |
Net cash used in investing activities | (123) | (11) | |
Financing Activities | |||
Change in cash book overdrafts | 29 | 16 | |
Cash dividends paid | (30) | (30) | |
Proceeds from issuances under stock compensation plans | 11 | 8 | |
Other, net | (9) | (8) | |
Net cash provided by (used in) financing activities | 1 | (14) | |
Net (decrease) increase in cash and cash equivalents | (106) | 162 | |
Cash and cash equivalents at beginning of period | 687 | 322 | |
Cash and cash equivalents at end of period | $581 | $484 |
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 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 (loss) earnings to adjusted EBIT and adjusted EBITDA and net earnings as a percent of net sales to adjusted EBIT margin:
Quarter Ended | |||
April 29, 2023 | April 30, 2022 | ||
Net (loss) earnings | ($205) | $20 | |
Income tax (benefit) expense | (82) | 18 | |
Interest expense, net | 28 | 35 | |
(Loss) earnings before interest and income taxes | (259) | 73 | |
Canada wind-down costs | 309 | — | |
Trunk Club wind-down costs | — | 10 | |
Gain on sale of interest in a corporate office building | — | (51) | |
Adjusted EBIT | 50 | 32 | |
Depreciation and amortization expenses | 144 | 152 | |
Amortization of developer reimbursements | (17) | (18) | |
Adjusted EBITDA | $177 | $166 | |
Net sales | $3,064 | $3,467 | |
Net (loss) earnings as a % of net sales | (6.7 %) | 0.6 % | |
EBIT margin % | (8.5 %) | 2.1 % | |
Adjusted EBIT margin % | 1.6 % | 0.9 % |
The following is a reconciliation of diluted EPS to adjusted EPS:
Quarter Ended | |||
April 29, 2023 | April 30, 2022 | ||
Diluted EPS | ($1.27) | $0.13 | |
Canada wind-down costs | 1.92 | — | |
Trunk Club wind-down costs | — | 0.06 | |
Gain on sale of interest in a corporate office building | — | (0.32) | |
Income tax impact on adjustments1 | (0.58) | 0.07 | |
Adjusted EPS | $0.07 | ($0.06) |
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; dollars in millions)
Our Nordstrom brand includes Nordstrom.com, Nordstrom U.S. stores, Nordstrom Local and ASOS | Nordstrom. Nordstrom also included Canada operations prior to March 2023, inclusive of Nordstrom.ca, Nordstrom Canadian stores and Nordstrom Rack Canadian stores; and TrunkClub.com prior to October 2022. 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 first quarter of 2023, compared with the first quarter of 2022:
Quarter Ended | |||
April 29, 2023 | April 30, 2022 | ||
Net sales: | |||
Nordstrom | $2,027 | $2,289 | |
Nordstrom Rack | 1,037 | 1,178 | |
Total net sales | $3,064 | $3,467 | |
Net sales (decrease) increase: | |||
Nordstrom | (11.4 %) | 23.5 % | |
Nordstrom Rack | (11.9 %) | 10.3 % | |
Total Company | (11.6 %) | 18.7 % | |
Digital sales as % of total net sales1 | 36 % | 39 % |
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.
FISCAL YEAR 2023 FORWARD-LOOKING NON-GAAP MEASURES
(NON-GAAP FINANCIAL MEASURES)
(unaudited)
Our adjusted EBIT as a percent of net sales ("adjusted EBIT margin") and adjusted EPS outlook for fiscal year 2023 excludes the impacts from certain items that we do not consider representative of our core operating performance. These items include charges from the wind-down of Canadian operations recognized in the first quarter of 2023.
The following is a reconciliation of expected net earnings as a percent of net sales to expected adjusted EBIT margin included within our Fiscal Year 2023 Outlook:
53 Weeks Ending February 3, 2024 | |||
Low | High | ||
Expected net earnings as a % of net sales | 0.7 % | 1.1 % | |
Income tax expense | — % | 0.1 % | |
Interest expense, net | 0.8 % | 0.8 % | |
Expected EBIT as a % of net sales | 1.5 % | 2.0 % | |
Canada wind-down costs | 2.2 % | 2.2 % | |
Expected adjusted EBIT margin | 3.7 % | 4.2 % |
The following is a reconciliation of expected diluted EPS to expected adjusted EPS included within our Fiscal Year 2023 Outlook:
53 Weeks Ending February 3, 2024 | |||
Low | High | ||
Expected diluted EPS | $0.60 | $1.00 | |
Canada wind-down costs | 1.89 | 1.89 | |
Income tax impact on adjustments | (0.69) | (0.69) | |
Expected adjusted EPS | $1.80 | $2.20 |
NORDSTROM, INC.
ADJUSTED RETURN ON INVESTED CAPITAL ("ADJUSTED ROIC")
(NON-GAAP FINANCIAL MEASURE)
(unaudited; dollars 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. In addition, we have incorporated it in our executive incentive measures and we believe it is an important indicator of shareholders' return over the long term.
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 | |||
April 29, 2023 | April 30, 2022 | ||
Net earnings | $20 | $364 | |
Income tax (benefit) expense | (8) | 142 | |
Interest expense | 138 | 145 | |
Earnings before interest and income tax expense | 150 | 651 | |
Operating lease interest1 | 85 | 86 | |
Adjusted net operating profit | 235 | 737 | |
Estimated income tax benefit (expense)2 | 166 | (206) | |
Adjusted net operating profit after tax | $401 | $531 | |
Average total assets | $9,061 | $9,228 | |
Average non-current deferred property incentives in excess of operating lease right-of-use | (188) | (223) | |
Average non-interest bearing current liabilities | (3,203) | (3,347) | |
Average invested capital | $5,670 | $5,658 | |
Return on assets | 0.2 % | 3.9 % | |
Adjusted ROIC4 | 7.1 % | 9.4 % |
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 | Estimated income tax benefit (expense) is calculated by multiplying the adjusted net operating profit by the effective tax rate for the trailing twelve-month periods ended April 29, 2023 and April 30, 2022. The effective tax rate is calculated by dividing income tax by earnings before income taxes for the same trailing twelve-month periods. |
3 | 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 Condensed Consolidated Balance Sheets. The current and non-current amounts are used to reduce average total assets above, as this better reflects how we manage our business. |
4 | Results for the four quarters ended April 29, 2023 included the $309 impact of the Canada wind-down in the first quarter of 2023, which negatively impacted return on assets by approximately 240 basis points and had an immaterial impact on Adjusted ROIC. |
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 the updates in 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. Our goal is to manage debt levels to achieve and maintain investment-grade credit ratings while operating with an efficient capital structure.
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:
April 29, 2023 | |
Debt | $2,857 |
Operating lease liabilities | 1,655 |
Adjusted debt | $4,512 |
Four Quarters Ended | |
Net earnings | $20 |
Income tax benefit | (8) |
Interest expense, net | 121 |
Earnings before interest and income taxes | 133 |
Depreciation and amortization expenses | 597 |
Operating lease cost1 | 275 |
Amortization of developer reimbursements2 | 71 |
Other Revolver covenant adjustments3 | 418 |
Adjusted EBITDAR | $1,494 |
Debt to Net Earnings | 141.4 |
Adjusted debt to EBITDAR | 3.0 |
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 April 29, 2023, other Revolver covenant adjustments primarily included costs associated with the wind-down of our Canadian operations, a supply chain technology and related asset impairment and the wind-down of Trunk Club. |
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:
Quarter Ended | |||
April 29, 2023 | April 30, 2022 | ||
Net cash provided by operating activities | $16 | $187 | |
Capital expenditures | (106) | (96) | |
Change in cash book overdrafts | 29 | 16 | |
Free Cash Flow | ($61) | $107 |
INVESTOR CONTACT: | Sara Penner | |
Nordstrom, Inc. | ||
InvRelations@Nordstrom.com | ||
MEDIA CONTACT: | Stephanie Corzett | |
Nordstrom, Inc. | ||
NordstromPR@Nordstrom.com |
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SOURCE Nordstrom, Inc.