53b8566be3300da254491193099af1dbfde3af05541549fdbdec02664175bb08

2a05852953182a05c1b35ae0807436f4b7ddadd38c8d97669f7b8a3c5e8a7c1d

7ebfb6a5181d0415deffbb8920f00f739fa97aa04cf491a3b90d3f88d9c8a3ea

1. You mentioned that shrink remains at all-time highs impacting margins; what specific measures are you implementing to address shrink, and when do you expect to see meaningful improvements?  **[JWN_3410110_6]** 
2. Inventory levels are slightly higher than desired due to slower sales in seasonal categories; how confident are you in your ability to manage inventory risk and avoid excessive markdowns, especially with the holiday season underway?  **[JWN_3410110_3]** 
3. Considering the noticeable sales decline starting at the end of October, can you elaborate on the factors contributing to this slowdown and how you plan to mitigate potential headwinds in the fourth quarter?  **[JWN_3410110_1]** 
4. With SG&A expenses impacted by higher labor costs and charges related to accelerated technology depreciation, what steps are you taking to control operating expenses, and how should we think about SG&A leverage moving forward?  **[JWN_3410110_5]** 
5. Credit card revenues declined modestly due to higher losses; how are you addressing the increased credit risk in your portfolio, and what impact do you anticipate this will have on earnings and customer financing options?  **[JWN_3410110_5]** 

928ba89d2535a7a29a7702461826c8fa82adb93e4392a69fba4de35c42d5748f

Nordstrom, Inc. (NYSE: JWN) is a leading fashion retailer founded in 1901, specializing in high-quality brand-name and private-label merchandise. The company operates through an integrated network of physical stores and digital platforms, offering apparel, shoes, beauty products, accessories, and home goods. Nordstrom serves customers through its full-price and off-price retail banners, providing personalized services and a seamless shopping experience across channels.  **[0000072333-24-000124_jwn-20241102.htm:12]** **[0000072333-24-000031_jwn-20240203.htm:9]** **[0000072333-24-000031_jwn-20240203.htm:59]** 

1. **Nordstrom** - Operates full-price retail stores, including Nordstrom U.S. stores, Nordstrom.com, and Nordstrom Local, offering a wide range of high-quality merchandise such as apparel, shoes, beauty products, accessories, and home goods.  **[0000072333-24-000124_jwn-20241102.htm:12]** **[0000072333-24-000031_jwn-20240203.htm:9]** **[0000072333-24-000031_jwn-20240203.htm:59]** 
   - **Nordstrom Local** - Smaller service-oriented locations providing personal styling, alterations, order pickup, and returns.  **[0000072333-24-000031_jwn-20240203.htm:9]** **[0000072333-24-000031_jwn-20240203.htm:59]** 
2. **Nordstrom Rack** - Functions as an off-price retailer with Nordstrom Rack U.S. stores, NordstromRack.com, and Last Chance clearance stores, offering discounted merchandise, including clearance items from Nordstrom and products sourced directly from vendors.  **[0000072333-24-000124_jwn-20241102.htm:12]** **[0000072333-24-000031_jwn-20240203.htm:9]** **[0000072333-24-000031_jwn-20240203.htm:59]**

3907e7271f6e95cc0aca6d874cbd7b2b759c3a8b34db7164985a0992a09007d1

Nordstrom

Nordstrom Rack

Total Net Sales

- Full-Price

- Off-Price

Credit Card Revenues, Net

Total Revenue

b62ec9e52a977fbe429663aba416d2dad3439eb393efcbc06c2bd509bf1cba73

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

1. **Q4 Slowdown and Cautious Outlook**  
   **Q:** Why has your Q4 outlook become more cautious?  
   **A:** Management observed a slowdown in sales trends starting in the last week of October across all businesses, prompting a more cautious Q4 outlook. They cited factors like calendar shifts with five fewer days between Thanksgiving and Christmas, unseasonably warm weather affecting cold-weather categories, and general election noise as contributors to this slowdown.  **[JWN_3410110_7]** **[JWN_3410110_12]** **[JWN_3410110_15]** 

2. **EBIT Margin Expansion and Shrink Impact**  
   **Q:** What are the key drivers for EBIT margin expansion?  
   **A:** The primary driver for EBIT margin expansion is top-line growth, with the company achieving over **4% year-to-date growth**. They also aim to improve supply chain and technology investments to benefit from their omnichannel strategy. Importantly, shrink remains at historically high levels, and reducing it is necessary for substantial margin expansion.  **[JWN_3410110_8]** 

3. **Inventory Levels and Cold Weather Categories**  
   **Q:** Why are inventory levels higher than expected?  
   **A:** Inventory levels are slightly higher than desired, mainly due to supporting the Rack business and increased stock in cold-weather categories like boots, outerwear, and sweaters. The unseasonably warm start to winter led to suppressed sales in these areas, resulting in higher inventory quantities, though inventory quality and aging remain healthy.  **[JWN_3410110_10]** **[JWN_3410110_12]** 

4. **Gross Margin Improvement and Promotional Environment**  
   **Q:** How did gross margin perform, and what's the outlook?  
   **A:** Gross margin improved by **50 basis points**, driven by strong regular-price selling, slightly stronger in the Nordstrom banner. For Q4, they expect year-over-year improvement in gross margin and profit. The promotional environment is always significant in Q4, and so far, it has met their expectations.  **[JWN_3410110_13]** 

5. **Rack Growth and New Store Expansion**  
   **Q:** What's the plan for Rack store growth?  
   **A:** The company plans to open **20 to 25 new Rack stores** each year, seeing ample opportunity due to being under-penetrated in certain areas. New Rack stores are a major source of customer acquisition, bringing in new customers who often shop across both banners.  **[JWN_3410110_9]** **[JWN_3410110_15]** 

6. **BOPUS at Rack and Impact**  
   **Q:** How will BOPUS at Rack affect sales?  
   **A:** Implementing Buy Online, Pick Up In Store (BOPUS) and store fulfillment at Rack, rolled out to 100 stores, will enhance customer experience by offering more inventory online. This is enabled by investments in RFID technology, leading to expected improvements in sales, margin, and the ability to serve more customers.  **[JWN_3410110_11]** 

7. **SG&A Leverage Expectations**  
   **Q:** At what sales growth will you leverage SG&A?  
   **A:** To leverage SG&A expenses, especially considering **2% to 3% inflation**, the company needs to achieve comparable sales growth of around **1%**. Rack growth will contribute to top-line growth, aiding in reaching this target.  **[JWN_3410110_15]** 

e0144ca1c62d2df9f885e5d7f6a382ef8516983f5ad575aa03b56704ed74e314

| Name                  | Position                          | Start Date           | Short Bio                                                                                                                                                                                                                     |
|-----------------------|-----------------------------------|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Erik B. Nordstrom     | Chief Executive Officer          | 2020                | Erik B. Nordstrom has been with Nordstrom for over 40 years, holding various leadership roles. He became CEO in 2020 and has driven investments in blending digital and physical retail experiences.  **[0001104659-24-096646_tm2423176d2_sc13d.htm:10]** **[0001104659-24-048880_tm2412088d1_sc13d.htm:3]** **[0000072333-24-000046_nord-20240411.htm:29]**                 |
| Cathy R. Smith        | Chief Financial Officer          | May 29, 2023        | Cathy R. Smith joined Nordstrom as CFO in May 2023, bringing over 30 years of financial leadership experience, including roles at Bright Health Group, Target Corporation, and Express Scripts.  **[0001213900-23-038127_ea178161ex99-1_nordstrom.htm:0]** **[0001213900-23-038127_ea178161-8k_nordstrom.htm:1]** **[0000072333-23-000150_jwn-20230729.htm:36]**                      |
| Peter E. Nordstrom    | President & Chief Brand Officer  | 2020                | Peter E. Nordstrom has been with Nordstrom since 1978. He became President & Chief Brand Officer in 2020 after serving as Co-President and holding other merchandising and store leadership roles.  **[0001104659-24-096646_tm2423176d2_sc13d.htm:10]** **[0000072333-24-000046_nord-20240411.htm:4]** **[0000072333-24-000046_nord-20240411.htm:29]**                   |
| Kenneth J. Worzel     | Chief Customer Officer           | April 2022          | Kenneth J. Worzel joined Nordstrom in 2010 and became Chief Customer Officer in April 2022. He previously served as COO, Chief Digital Officer, and President of Nordstrom.com.  **[0000072333-24-000046_nord-20240411.htm:42]** **[0001213900-23-033898_def14a0423_nordstrom.htm:45]**                                        |
| Jason Morris          | Chief Technology and Information Officer | May 2023        | Jason Morris joined Nordstrom as Chief Technology and Information Officer in May 2023. He previously held senior technology roles at Walmart, including SVP of Enterprise Business Services.  **[0000072333-24-000046_nord-20240411.htm:41]**                              |
| Fanya Chandler        | President, Nordstrom Stores      | September 2023      | Fanya Chandler has been with Nordstrom since 1991. She became President of Nordstrom Stores in September 2023 after holding various leadership roles, including SVP of the Southwest Region.  **[0000072333-24-000046_nord-20240411.htm:41]** **[0000072333-23-000177_jwnq32023ex992.htm:2]**                          |
| Alexis DePree         | Chief Supply Chain Officer       | January 2020        | Alexis DePree joined Nordstrom as Chief Supply Chain Officer in January 2020. She previously held leadership roles at Amazon, Target, and Dell Technologies.  **[0000072333-24-000046_nord-20240411.htm:41]** **[0001213900-23-033898_def14a0423_nordstrom.htm:44]** **[0001213900-23-030058_pre14a0423_nordstrom.htm:44]**                                                       |
| Gemma Lionello        | President, Nordstrom Rack        | September 2023      | Gemma Lionello has been with Nordstrom since 1988. She became President of Nordstrom Rack in September 2023 after holding leadership roles in regional management and merchandising.  **[0000072333-24-000046_nord-20240411.htm:41]**                                       |
| James F. Nordstrom, Jr.| Chief Merchandising Officer     | September 2023      | James F. Nordstrom, Jr. has been with Nordstrom since 1986. He became Chief Merchandising Officer in September 2023 after serving as Chief Stores Officer and holding other merchandising and store leadership roles.  **[0001104659-24-131447_xslSCHEDULE_13D_X01/primary_doc.xml:8]** **[0000072333-24-000046_nord-20240411.htm:41]** **[0001213900-23-033898_def14a0423_nordstrom.htm:44]**  |

77408a59fade280c4831427d8ddf4d4e8100768e8564d5614d45190eab00190a

| Program Details         | Program 1            |
|-------------------------|----------------------|
| **Approval Date**       | **May 2022**  **[0000072333-24-000124_jwn-20241102.htm:36]** **[0000072333-24-000124_jwn-20241102.htm:14]**  |
| **End Date/Duration**   | **No expiration**  **[0000072333-24-000124_jwn-20241102.htm:36]** **[0000072333-24-000124_jwn-20241102.htm:14]**  |
| **Total Additional ($M)** | **500**  **[0000072333-24-000124_jwn-20241102.htm:36]** **[0000072333-24-000124_jwn-20241102.htm:14]**      |
| **Remaining ($M)**      | **438** as of 2024-11-02  **[0000072333-24-000124_jwn-20241102.htm:36]** **[0000072333-24-000124_jwn-20241102.htm:14]**  |
| **Details**             | No shares repurchased during the nine months ended November 2, 2024  **[0000072333-24-000124_jwn-20241102.htm:36]** **[0000072333-24-000124_jwn-20241102.htm:14]**  |

3bf7e72b9a6a34c39fea3b1432a2ffc7b1959e15e21d099834f3ab4f86757bf8

### Q3 2025 Earnings Call
- **Issued Period**: Q3 2025
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue and Comparable Sales**:
     - Full year revenue: Flat to an increase of **1%**, with a **135 basis points** headwind from the 53rd week in 2023.
     - Comparable sales growth: **1% to 2%** in 2024 versus 52 weeks in 2023.  **[JWN_3410110_6]** 
  2. **Profitability**:
     - EBIT margin: **3.6% to 4%**.  **[JWN_3410110_6]** 
  3. **Tax Rate**:
     - Effective tax rate: Approximately **27%**.  **[JWN_3410110_6]** 
  4. **Earnings Per Share (EPS)**:
     - EPS: **$1.75 to $2.05**, excluding share repurchases.  **[JWN_3410110_6]** 
  5. **SG&A Expenses**:
     - Charges: **10 basis points** to SG&A expense in Q4 due to accelerated technology depreciation.  **[JWN_3410110_6]** 
  6. **Capital Allocation**:
     - Quarterly cash dividend: **$0.19 per share**.  **[JWN_3410110_6]** 

### Q2 2025 Earnings Call
- **Issued Period**: Q2 2025
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue**:
     - Full year revenue: Decline of **1%** to an increase of **1%**, with a **135 basis points** headwind from the 53rd week in 2023.  **[JWN_3400020_6]** 
  2. **Comparable Sales**:
     - Comparable sales: Flat to an increase of **2%** in 2024 versus 52 weeks in 2023.  **[JWN_3400020_6]** 
  3. **EBIT Margin**:
     - EBIT margin: **3.6% to 4%**.  **[JWN_3400020_6]** 
  4. **Effective Tax Rate**:
     - Tax rate: Approximately **27%**.  **[JWN_3400020_6]** 
  5. **Earnings Per Share (EPS)**:
     - EPS: **$1.75 to $2.05**, excluding share repurchases.  **[JWN_3400020_6]** 
  6. **SG&A Expense**:
     - Charges: **10 basis points** to SG&A expense in Q3 and Q4 due to accelerated IT asset depreciation.  **[JWN_3400020_6]** 

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue**:
     - Full year revenue: Decline of **2%** to an increase of **1%**, with a **135 basis points** headwind from the 53rd week in 2023.  **[JWN_3391309_6]** 
     - Comparable sales: Decrease of **1%** to an increase of **2%** in 2024 versus 52 weeks in 2023.  **[JWN_3391309_6]** 
  2. **Earnings Per Share (EPS)**:
     - EPS: **$1.65 to $2.05**, excluding share repurchases.  **[JWN_3391309_6]** 
  3. **EBIT Margin**:
     - EBIT margin: **3.5% to 4%**.  **[JWN_3391309_6]** 
  4. **Tax Rate**:
     - Tax rate: Approximately **27%**.  **[JWN_3391309_6]** 
  5. **Capital Expenditures**:
     - Capital expenditures: **3% to 4% of net sales**.  **[JWN_3391309_6]** 
  6. **Credit Revenue**:
     - Credit revenue: Approximately **3% of total revenue**.  **[JWN_3391309_14]** 
  7. **Nordstrom Rack Store Openings**:
     - New stores: **22** in 2024.  **[JWN_3391309_2]** 

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue**:
     - Full year revenue: Decline of **2%** to an increase of **1%**, with a **135 basis points** headwind from the 53rd week in 2023.  **[JWN_3376628_5]** 
     - Comparable sales: Decrease of **1%** to an increase of **2%** in 2024 versus 52 weeks in 2023.  **[JWN_3376628_5]** 
  2. **EBIT Margin**:
     - EBIT margin: **3.5% to 4%**.  **[JWN_3376628_5]** 
  3. **Effective Tax Rate**:
     - Tax rate: **27%**.  **[JWN_3376628_5]** 
  4. **Earnings Per Share (EPS)**:
     - EPS: **$1.65 to $2.05**.  **[JWN_3376628_5]** 
  5. **Capital Expenditures**:
     - Capital expenditures: **3% to 4% of net sales**.  **[JWN_3376628_5]** 
  6. **Leverage Ratio**:
     - Leverage ratio: Below **2.5x**.  **[JWN_3376628_5]** 
  7. **Credit Card Revenue**:
     - Credit card revenue: Closer to **3% of net sales**.  **[JWN_3376628_5]** 
  8. **Rack Store Openings**:
     - New stores: **22** in 2024.  **[JWN_3376628_3]** 

3a3df6ae0f1d1e6e9ca303430d8532e68224c051b1cb6d22c623767ea20efc26

- **Nordstrom Rack delivered strong growth**, with net sales increasing by **8.8%** and comparable sales up **4.1%**, driven by new store openings and a standout performance in digital channels.  **[JWN_3400020_13]** **[JWN_3400020_8]**
- **Gross margin expanded by 155 basis points** to **36.6%**, reflecting **strong regular price sales** across both banners and improvements in shrink, contributing to higher profitability.  **[JWN_3400020_14]**
- The company is successfully **opening new Rack stores** with consistent **mid- to high-teens IRR**, with plans to open **23 new stores** this year and sees continued opportunities to expand at this pace.  **[JWN_3400020_11]** **[JWN_3400020_8]**

08e39c18b6bace3207eb9fa959fd7aa52c1a947857d7e4b561f1b5e485136a8d

- **New Rack stores are delivering strong returns and are a key driver of growth for Nordstrom, with excellent investments, improving performance, and efficiency.**  **[JWN_3376628_10]** **[JWN_3376628_7]** **[JWN_3376628_16]**
- **Urban flagship stores, including New York, are among Nordstrom's fastest-growing stores, showing strong growth and recovery.**  **[JWN_3376628_10]**
- **Nordstrom's focus on key strategic brands in Rack stores is a competitive advantage that attracts customers and lifts overall sales.**  **[JWN_3376628_16]**

8eb7791530775ea010c46b45ddf4c2d8adf1790f2a1f517aa1b92b7934c16976

- **Sales trends slowed down starting in late October**, with a **decline in trend across all businesses**, indicating potential weakening consumer demand heading into the important holiday season.  **[JWN_3410110_3]** **[JWN_3410110_15]** **[JWN_3410110_12]**
- **Inventory levels are higher than desired**, especially in **cold weather categories like boots, outerwear, and sweaters**, due to unseasonably warm weather suppressing sales, posing risks of markdowns and margin pressure if demand doesn't pick up.  **[JWN_3410110_12]** **[JWN_3410110_15]** **[JWN_3410110_11]**
- **Shrink (inventory loss) is at historically high levels**, which the company acknowledges will need to decrease to achieve margin expansion, signaling ongoing challenges in loss prevention impacting profitability.  **[JWN_3410110_8]**

6e2eea405ccf4a9c0f206372946351ba2b8509f00bccdfeff79f55a21df81683

- **Cautious Outlook for the Second Half:** Despite exceeding second-quarter earnings expectations, Nordstrom is only **slightly increasing its full-year guidance** and remains cautious about the second half of the year, citing an uncertain environment and noting that **two-thirds of profits typically come in the second half**.  **[JWN_3400020_12]**
- **Inventory Growth Outpacing Sales:** The company acknowledged that **inventory levels grew faster than sales**, particularly in the Rack segment, admitting they were **"a little over"** in inventory, which could lead to potential markdowns and margin pressure.  **[JWN_3400020_12]** **[JWN_3400020_8]**
- **Flat Store Traffic and Comparable Sales:** While digital channels showed strong traffic, the company reported that **store traffic and comparable sales were fairly flat**, indicating challenges in driving growth in physical stores and potential over-reliance on digital sales.  **[JWN_3400020_13]**

7e2118ceb4db67c55aaf5b81a1bf3fe243ed12b42408b40567a4467cf0dfc6af

- **Nordstrom Rack is experiencing strong growth**, with plans to open **20 to 25 new stores per year**, due to ample opportunity in under-penetrated areas.  **[JWN_3410110_15]**
- **Customer health metrics are positive**, showing increased **customer count growth** and **purchase trips growth across both banners**, indicating strong consumer engagement.  **[JWN_3410110_9]**
- **Efforts to invest in best-performing brands are paying off**, particularly in **women's apparel**, leading to **double-digit growth** in private label sales and increased confidence in their merchandising strategy.  **[JWN_3410110_10]**

3d2b737c599c2e89d205b7fc74b04fc24bea56b7b0fd56d5cad30650f60ec629

- **Gross margin is under pressure**, with a decrease of **200 basis points** in Q1 2025 compared to expectations, due to timing and operational issues.  **[JWN_3391309_13]** **[JWN_3391309_15]**
- The company is experiencing **sales drop-offs in designer categories**, which have been more challenged on the top line.  **[JWN_3391309_17]**
- Nordstrom does not expect to return to **double-digit EBIT margins** in the near future, aiming first to reach the **6% EBIT margin** achieved in 2019.  **[JWN_3391309_19]**

6e99977a8814b8f23b85820bce164a1602a4378764cc4a3787a250504d0ad186

- **Positive Sales Momentum in Q1 Across Both Banners:** Sales were positive in each month during Q1 at the JWN level, with continued positive trends quarter-to-date.  **[JWN_3391309_7]**  This demonstrates strong consumer demand and effective strategies across both Nordstrom and Nordstrom Rack.
- **Healthy Inventory Levels and Expectation of Healthier Margins:** Despite challenges in the designer category, inventory levels are in the right position to meet demand, leading to expectations of healthier margins going forward. Sales are still up over **20% from 2019 levels** in designer categories.  **[JWN_3391309_17]**
- **Focus on Driving EBIT Margin Growth:** The company is focused on increasing EBIT margins, targeting a return to the **6% EBIT margin** achieved in 2019, with expectations to grow beyond that. Investments in supply chain capabilities and technology are driving improvements and productivity.  **[JWN_3391309_19]**

36e4ee040130d0caa736db386267882eee84dfed4bb66db76c5b3dc3d951cf94

- **EBIT margin is under pressure due to SG&A headwinds**, including investments in new Rack store openings and increased labor costs that are not fully offset by productivity improvements.  **[JWN_3376628_9]**
- **Store traffic remains soft at Nordstrom banner stores and digital channels**, with only slight sequential improvements, potentially limiting future sales growth.  **[JWN_3376628_8]**
- **Accessories, particularly handbags, have been weak throughout the year with no significant improvement**, continuing to drag on overall sales.  **[JWN_3376628_13]**

0424a73ee9983bcabd86ed32941a45b4f6dd6801555ef529da31e240d1ce81b0

Nordstrom Inc (JWN)

Financials