Nordstrom's Upscale Earnings: Fool by Numbers

On May 17, Nordstrom (NYSE: JWN  ) released first-quarter earnings for the period ended May 5.

  • Customers responded favorably to Nordstrom's continued expansion of luxury designer offerings, generating 9.3% more revenue compared to 2006.
  • Robust sales from the spring collection, coupled with improving margins, boosted earnings per shares an impressive 25%.
  • Management shifted its entire securitization program onto the balance sheet, resulting in $850 million in securitized debt, $943 million in co-branded Visa receivables, and $300 million in cash.
  • Shoppers seem unfazed by economic concerns; Nordstrom and its peers J.C. Penney (NYSE: JCP  ) and Kohl's (NYSE: KSS  ) all posted better-than-expected earnings.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$1,953.9

$1,787.2

9.3%

Net Profit

$156.8

$131.2

19.5%

EPS

$0.60

$0.48

25%

Diluted Shares

262.7

272.8

(3.7%)

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

37.8%

37.2%

0.7

Operating Margin

10.5%

9.5%

1.0

Net Margin

8%

7.3%

0.7

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$744.6

$291.3

155.6%

Accounts Rec.

$1,602.5

$619.1

158.8%

Inventory

$1,105.0

$1,078.8

2.4%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$699.7

$639.0

9.5%

Long-Term Debt

$1,474.6

$624.9

136%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

($457.5)

$28.8

N/A

Capital Expenditures

$85.8

$47.5

80.6%

Free Cash Flow

($543.4)

($18.8)

N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.


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