SEATTLE, Jan. 25, 2024 /PRNewswire/ -- Seattle-based fashion retailer Nordstrom, Inc. (NYSE: JWN) announced plans to open a new Nordstrom Rack in Fort Myers, Florida in fall 2024. "We look forward to being a part of the Fort Myers community and serving our customers with an amazing offering of great brands at great prices," said Gemma Lionello, President of Nordstrom Rack Stores. "We're excited to grow our footprint in the region and introduce new customers to the Nordstrom experience." Lionello added that ...

This Valentine's Day, a lucky pasta lover will win the customized 'Ring-a-toni' – two interlocking, pasta-inspired rings and grand prize valued at nearly $33KNORTHBROOK, Ill., Jan. 17, 2024 /PRNewswire/ -- Back by popular demand, Barilla's heart-shaped pasta, Barilla Love, will be available to fans both on shelves at select grocery locations and on menus at Nordstrom Restaurant Group locations nationwide. To celebrate its return, Barilla is introducing The Pasta Promise – the commitment of a lifetime to alw ...

SEATTLE, Dec. 21, 2023 /PRNewswire/ -- Seattle-based fashion retailer Nordstrom, Inc. (NYSE: JWN) announced plans to open a new Nordstrom Rack in Houston, Texas in fall 2024. "We look forward to being a part of the Houston community and serving our customers with an amazing offering of great brands at great prices," said Gemma Lionello, President of Nordstrom Rack Stores. "We're excited to grow our footprint in the region and introduce new customers to the Nordstrom experience." Lionello added that in this ...

Financial Performance - Net sales for the quarter ended October 28, 2023, were $3,200 million, a decrease of 6.8% compared to $3,433 million for the same quarter in 2022[24]. - Total revenues for the nine months ended October 28, 2023, were $10,273 million, down 8.3% from $11,211 million for the same period in 2022[24]. - Net earnings for the quarter were $67 million, compared to a net loss of $20 million in the same quarter last year[27]. - Earnings per share (EPS) for the quarter was $0.41, compared to a loss per share of $0.13 in the prior year[24]. - Total net sales for the quarter ended October 28, 2023, were $3.2 billion, a decrease from $3.433 billion in the same quarter of the previous year[71]. - For the third quarter of 2023, the company reported net earnings of $67 million, or $0.41 per diluted share, compared to a loss of $20 million, or $0.13 loss per diluted share, in 2022[97]. - Diluted EPS for the third quarter of 2023 was $0.41, an improvement of $0.54 compared to a loss of $0.13 in the same period of 2022[123]. - Adjusted EPS for the third quarter of 2023 was $0.25, compared to $0.20 in the third quarter of 2022, after excluding adjustments from the wind-down of Canadian operations[97]. Inventory and Supply Chain - Merchandise inventories increased to $2,626 million as of October 28, 2023, from $2,878 million a year earlier, reflecting a decrease of 8.7%[29]. - Ending inventory levels were 9% lower than the third quarter of 2022, contributing to a 180 basis point expansion in gross profit as a rate of sales[101]. - Ending inventory as of October 28, 2023, decreased by 8.8% compared to the same period in 2022, reflecting strong inventory discipline[115]. - The company plans to continue focusing on optimizing its supply chain and managing inventory levels in response to market conditions[39]. - The company achieved a 50 basis point reduction in variable supply chain costs in the third quarter of 2023, following four consecutive quarters of reductions exceeding 100 basis points[102]. Financial Position and Liabilities - Total current liabilities rose to $3,709 million as of October 28, 2023, compared to $3,839 million a year earlier, a decrease of 3.4%[29]. - Cash and cash equivalents decreased to $375 million at the end of the period, down from $687 million at the beginning of the year[33]. - The total shareholders' equity as of October 28, 2023, was $729 million, an increase from $606 million a year earlier[29]. - The company had total short-term borrowing capacity of $800 million under the Revolver as of October 28, 2023, with no borrowings outstanding[142]. - Adjusted debt to EBITDAR is 3.1, with total adjusted debt at $4,496 million as of October 28, 2023[147]. - Net earnings for the four quarters ended October 28, 2023, were $119 million, resulting in a debt to net earnings ratio of 24.0[147]. Wind-Down of Nordstrom Canada - The company incurred $207 million in Canada wind-down costs during the nine months ended October 28, 2023[34]. - For the nine months ended October 28, 2023, Nordstrom recorded a pre-tax loss on Canada write-off of $174 million, including derecognition of Nordstrom Canada's assets and liabilities[59]. - Total pre-tax charges associated with the wind-down of Nordstrom Canada amounted to $284 million, with a gain on Canada write-off of $14 million for the quarter ended October 28, 2023[54]. - The wind-down of Nordstrom Canada has resulted in an estimated fair value of zero for related receivables as of April 29, 2023, with ongoing assessments of claims and recoverability[150]. - Nordstrom established an employee trust and contributed $11 million to fund termination and severance payments for employees of Nordstrom Canada[63]. Operational Highlights - The company opened 19 new stores and relocated one store year-to-date through December 1, 2023, with plans to open 17 more stores beyond 2023[100]. - The company opened 18 Nordstrom Rack stores and relocated one store during the nine months ended October 28, 2023[111]. - Digital sales accounted for 34% of total net sales for the quarter ended October 28, 2023, consistent with the same percentage in the prior year[71]. - Digital sales accounted for 34% of total net sales, with a decrease of 11% in the third quarter of 2023 compared to the same period in 2022[107]. - The retail segment EBIT for the third quarter of 2023 was $149 million, up from $119 million in the same quarter of 2022[92]. Cash Flow and Capital Expenditures - Free Cash Flow for the nine months ended October 28, 2023, was negative $231 million, compared to negative $64 million for the same period in 2022[141]. - Capital expenditures for the nine months ended October 28, 2023, were $375 million, representing 3.8% of net sales, compared to $325 million or 3.0% in the prior year[135]. - Dividends paid for the nine months ended October 28, 2023, were $92 million, compared to $90 million for the same period in 2022[138]. Risk and Compliance - There have been no material changes to the company's critical accounting estimates since the 2022 Annual Report, except for updates related to the Canada wind-down[149]. - The company continues to evaluate its internal controls and has concluded that its disclosure controls and procedures are effective as of the reporting date[160]. - Recent SEC rules regarding insider trading and share repurchase disclosures will be effective in the fourth quarter of 2023, but are not expected to materially impact operations[153][154]. - The company has not identified any current claims or litigation that would materially impact its financial position or cash flows[166]. - Interest rate risk and foreign currency exchange risk remain unchanged since the last report[157].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 29, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to___________ Commission File Number: 001-15059 Nordstrom, Inc. (Exact name of registrant as specified in its charter) (State or ...

Financial Data and Key Metrics - Q2 2023 earnings per share (EPS) was $0.84, up from $0.77 in the same period last year, despite $330 million fewer sales [42] - EBIT margin for Q2 was 5.3%, up 20 basis points year-over-year [46] - Inventory decreased by 18% compared to last year, with sales down 8%, indicating improved inventory productivity [45][71] - Supply chain costs fell by over 100 basis points for the fourth consecutive quarter, contributing to operational efficiencies [32][72] - Full-year revenue is expected to decline 4% to 6%, with a 2.5 percentage point negative impact from the wind-down of Canadian operations [47] Business Line Performance - Nordstrom Rack sales decreased 4% in Q2, improving sequentially from a 12% decline in Q1 [44] - Strategic brand penetration at Nordstrom Rack reached 65% of sales, with plans to maintain this level in the second half [30][40] - Digital sales accounted for over 60% of the Anniversary Sale, with 40% of digital sales enabled by stores [65] - Active footwear and beauty categories performed well, with Active footwear driven by brands like Hoka, On Running, and Nike [36] - Women's apparel improved sequentially but remained below average, while men's and kids' apparel performed better than average [36] Market Performance - Nordstrom banner sales and GMV decreased by 10% year-over-year, with sales improving sequentially from Q1 [43] - The Anniversary Sale saw a 5% decline in total event sales compared to last year, but strong sell-through improved inventory positioning [38] - Designer categories remain under pressure, with efforts to rightsize inventory ongoing [63] - Traffic trends were soft across both banners, but higher conversion and spend per customer offset some of the decline [108] Strategic Direction and Industry Competition - Nordstrom Rack is identified as a key growth vehicle, with plans to open 11 additional stores by the end of 2023 [58] - Digital channels are seen as a significant opportunity, leveraging physical assets to enhance customer experience [14] - Investments in AI and analytics are being made to improve operational efficiency and customer experience [17][18] - The company is focusing on inventory productivity, supply chain optimization, and improving Nordstrom Rack performance as key priorities [27][57] Management Commentary on Operating Environment and Outlook - Management remains confident in delivering the 2023 financial outlook despite economic uncertainty [29] - The company is navigating a cautious consumer environment, with potential headwinds from rising delinquencies in the credit card business [48][85] - Sequential improvement in sales trends is expected to continue through the second half of the year [78] - The 53rd week in fiscal 2023 is expected to add approximately $200 million in sales in Q4 [97] Other Important Information - The company declared a quarterly cash dividend of $0.19 per share [76] - Credit card revenues were up 10% in the first half of the year, but delinquencies are rising and could impact future credit losses [48][85] - The company is focused on reducing leverage and maintaining an investment-grade credit rating, targeting a leverage ratio below 2.5x [99] Q&A Session Summary Question: How should we think about the pace of full banners in the back half of the year? - Sequential improvement is expected to continue, with easier year-over-year comparisons in Q3 and Q4 [78][100] Question: Can you provide more detail on the drivers of Rack performance during the quarter? - Rack performance improved steadily, driven by strategic brand penetration and better inventory management [107][108] Question: What are your expectations for credit card losses in the back half of the year? - Delinquencies are rising and could lead to higher credit losses, though the portfolio remains resilient [85][111] Question: How is new store productivity ramping versus expectations? - New Rack stores are performing well, with returns exceeding the cost of capital [135] Question: What is the outlook for gross margin and shrink for the remainder of the year? - Gross margin is expected to improve in Q4 due to reduced markdowns, while shrink remains a concern but is within planned levels [118][138] Question: What is the path forward for e-commerce growth? - The company focuses on a seamless customer experience across channels, with digital sales impacted by operational changes and comparisons to last year [148] Question: What are the incremental opportunities to drive top-line improvement at Rack? - Strategic brand penetration and inventory agility are key drivers, with opportunities to invest in higher-performing brands [131][153]

1Excludes impact from Q2 22 costs from wind-down of Trunk Club. ²Excludes 275bps from wind-down of Canadian operations and ~200bps from timing shift of Anniversary Sale. One-of-a-kind event, with brand new merchandise sold at reduced prices, before going to full-price after the sale NORDSTROM Q2 2023 EARNINGS CALL FORWARD-LOOKING STATEMENTS This presentation contains statements that are forward looking. These statements are based upon current expectations and assumptions that are subject to risks and uncert ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 29, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to___________ Commission File Number: 001-15059 Nordstrom, Inc. (Exact name of registrant as specified in its charter) (State or ...

FORM 10-K Filing Information [Filing Details](index=1&type=section&id=Filing%20Details) This document is an Annual Report on Form 10-K for Nordstrom, Inc. for the fiscal year ended January 28, 2023. The registrant is a well-known seasoned issuer and a large accelerated filer, having filed all required reports during the preceding 12 months - The report is an Annual Report on Form 10-K for the fiscal year ended January 28, 2023[2](index=2&type=chunk) - Nordstrom, Inc. is a **well-known seasoned issuer** and a **large accelerated filer**[3](index=3&type=chunk)[7](index=7&type=chunk) Title of each class | Title of each class | Trading Symbol | Name of each exchange on which registered | | :------------------ | :------------- | :---------------------------------------- | | Common stock, without par value | JWN | New York Stock Exchange | [Market Value and Outstanding Shares](index=1&type=section&id=Market%20Value%20and%20Outstanding%20Shares) As of July 29, 2022, the aggregate market value of Nordstrom's voting and non-voting stock held by non-affiliates was approximately $3.0 billion. On March 6, 2023, there were 160,151,038 shares of common stock outstanding - Aggregate market value of voting and non-voting stock held by non-affiliates was approximately **$3.0 billion** as of July 29, 2022[4](index=4&type=chunk) - **160,151,038 shares** of common stock were outstanding on March 6, 2023[4](index=4&type=chunk) Table of Contents Forward-Looking Statements [Nature of Forward-Looking Statements](index=5&type=section&id=Nature%20of%20Forward-Looking%20Statements) This section clarifies that forward-looking statements are not historical facts but are based on management's beliefs and assumptions, subject to known and unknown risks and uncertainties. These statements are estimates as of the filing date and may not occur as anticipated - Forward-looking statements are based on management's beliefs and assumptions, not historical facts, and involve known and unknown risks and uncertainties[11](index=11&type=chunk) - These statements represent estimates and assumptions only as of the filing date and may prove incorrect, with no obligation to update publicly unless required by law[19](index=19&type=chunk)[21](index=21&type=chunk) [Key Risk Categories](index=5&type=section&id=Key%20Risk%20Categories) The company identifies several categories of risks that could materially affect its actual results, including strategic and operational, data and cybersecurity, reputation and relationships, investment and capital, economic and external, and legal and regulatory factors - Strategic and Operational risks include successful execution of customer strategy, business model implementation, merchandise management, marketing effectiveness, supply chain disruptions, cost control, talent acquisition/retention, and credit card program benefits[12](index=12&type=chunk)[14](index=14&type=chunk) - Data, Cybersecurity and Information Technology risks involve system failures, cybersecurity breaches, and compliance with information security and privacy laws[13](index=13&type=chunk)[14](index=14&type=chunk) - Reputation and Relationships risks cover maintaining customer, employee, vendor, and partner relationships, corporate social responsibility, and impacts from stock ownership concentration[15](index=15&type=chunk)[20](index=20&type=chunk) - Investment and Capital risks relate to capital resource allocation, store expansion/maintenance, market fluctuations, debt compliance, and share repurchases/dividends[16](index=16&type=chunk)[20](index=20&type=chunk) - Economic and External risks include epidemics/pandemics, seasonality, economic conditions (inflation, unemployment), traffic patterns, financial insecurity of partners, and natural disasters/global conflicts[17](index=17&type=chunk)[20](index=20&type=chunk) - Legal and Regulatory risks encompass compliance with laws, litigation, tax reforms, accounting rule changes, and the wind-down of Canadian operations[18](index=18&type=chunk)[20](index=20&type=chunk) Definitions of Commonly Used Terms [Key Financial and Operational Terms](index=9&type=section&id=Key%20Financial%20and%20Operational%20Terms) This section provides definitions for various financial and operational terms used throughout the report, including non-GAAP measures like Adjusted EPS and Adjusted ROIC, as well as operational terms such as Digital sales, GMV, and Supply Chain Network Term Definitions | Term | Definition | | :--- | :--- | | Adjusted EPS | Adjusted earnings (loss) per diluted share (a non-GAAP financial measure) | | Adjusted ROIC | Adjusted return on invested capital (a non-GAAP financial measure) | | Digital sales | Sales conducted through a digital platform such as our websites or mobile apps | | EBIT | Earnings (loss) before interest and income taxes | | EBITDAR | Earnings (loss) before interest, income taxes, depreciation, amortization and rent, as defined by our Revolver covenant | | EPS | Earnings (loss) per share | | Fiscal year 2023 | 53 fiscal weeks ending February 3, 2024 | | Fiscal year 2022 | 52 fiscal weeks ending January 28, 2023 | | GMV | Gross merchandise value | | Gross profit | Net sales less cost of sales and related buying and occupancy costs | | Leverage Ratio | The sum of our funded debt and operating lease liabilities divided by the preceding twelve months of Adjusted EBITDAR as defined by our Revolver covenant | | NMN | Nordstrom Media Network, where we use our first party data and marketing infrastructure to drive cooperative marketing with vendors across both offsite and onsite marketing platforms | | Nordstrom | Nordstrom.com, Nordstrom U.S. stores, Canada, which includes Nordstrom.ca, Nordstrom Canadian stores and Nordstrom Rack Canadian stores, Nordstrom Local, ASOS \| Nordstrom and, prior to October 2022, TrunkClub.com | | Nordstrom Local | Nordstrom Local service hubs, which offer order pickups, returns, alterations and other services | | Nordstrom Rack | NordstromRack.com, Nordstrom Rack U.S. stores, Last Chance clearance stores and, prior to the first quarter of 2021, HauteLook.com | | The Nordy Club | Our customer loyalty program | | ROU asset | Operating lease right-of-use asset | | SG&A | Selling, general and administrative | | Supply Chain Network | Fulfillment centers that primarily process and ship orders to our customers, distribution centers that primarily process and ship merchandise to our stores and other facilities and omni-channel centers that both fulfill customer orders and ship merchandise to our stores | PART I [Item 1. Business.](index=10&type=section&id=Item%201.%20Business.) Nordstrom, Inc. operates as a leading fashion retailer, founded in 1901, offering high-quality brand-name and private label merchandise across its Nordstrom and Nordstrom Rack banners. The company focuses on apparel, shoes, beauty, accessories, and home goods, emphasizing superior service and an interconnected business model leveraging both digital and physical assets. In March 2023, Nordstrom Canada commenced a wind-down of its operations - Nordstrom, Inc. was founded in **1901** and operates as a leading fashion retailer with one reportable segment aggregating Nordstrom and Nordstrom Rack[26](index=26&type=chunk) - The company offers extensive selections of high-quality brand-name and private label merchandise, focusing on apparel, shoes, beauty, accessories, and home goods[26](index=26&type=chunk) - Nordstrom Canada commenced a wind-down of its business operations on **March 2, 2023**[27](index=27&type=chunk) [Description of Business](index=10&type=section&id=Description%20of%20Business) - Nordstrom operates Nordstrom.com, Nordstrom.ca, **94 U.S. stores**, **6 Canadian stores**, **7 Nordstrom Locals**, and **1 ASOS \| Nordstrom store** as of January 28, 2023[31](index=31&type=chunk) - Nordstrom Rack operates NordstromRack.com, **241 U.S. stores**, and **2 Last Chance clearance stores** as of January 28, 2023[31](index=31&type=chunk) - The 'Closer to You' strategy leverages an integrated network of physical and digital assets to provide greater merchandise selection for next-day pickup/delivery and enhanced express services, with customers shopping across both channels spending over **twelve times more**[29](index=29&type=chunk)[30](index=30&type=chunk) - The program agreement with TD for credit card revenue was amended in Q4 2022, extending the term through **September 2026**[31](index=31&type=chunk)[32](index=32&type=chunk) [Products](index=12&type=section&id=Products) - The company sources merchandise from a wide variety of high-quality domestic and foreign suppliers, utilizing unowned inventory models and private label manufacturing[33](index=33&type=chunk) - Nordstrom Rack uses a 'pack and hold' inventory strategy to strategically purchase and hold merchandise from top brands for deployment during high demand or tight supply periods[34](index=34&type=chunk) [Return Policy](index=12&type=section&id=Return%20Policy) - Nordstrom has a flexible, case-by-case return policy with no formal time limit for Nordstrom stores and Nordstrom.com, aiming for customer satisfaction[35](index=35&type=chunk) - Nordstrom Rack generally accepts returns of apparel, footwear, accessories, and home products with original tags and receipts within **30 days** for stores and **40 days** for NordstromRack.com[35](index=35&type=chunk) [Loyalty Program](index=12&type=section&id=Loyalty%20Program) - The Nordy Club loyalty program offers points, Nordstrom Notes, exclusive access, enhanced services, and personalized experiences based on spending and participation[36](index=36&type=chunk) - Customers using Nordstrom-branded credit/debit cards receive additional benefits, including early access to sales and incremental point accumulation[37](index=37&type=chunk) [Supply Chain Network](index=12&type=section&id=Supply%20Chain%20Network) - The Supply Chain Network includes **three fulfillment centers**, **six distribution centers**, and **one omni-channel center**, continuously expanding to support omni-channel capabilities and faster delivery[38](index=38&type=chunk)[41](index=41&type=chunk) - The first large-scale omni-channel center in Riverside, California, opened in **2020**, with plans to add Nordstrom Rack inventory and fulfillment[39](index=39&type=chunk) [Employees](index=12&type=section&id=Employees) - As of January 28, 2023, Nordstrom employed approximately **60,000 employees** (**80% hourly**, **20% salaried**), with **75%** supporting stores and **12%** supporting the Supply Chain Network[42](index=42&type=chunk) - The company is committed to diversity, equity, inclusion, and belonging, with 2025 ambitions including **$500 million** in retail sales from Black/Latinx-owned brands and a **50% increase** in Black/Latinx individuals in people-manager roles[44](index=44&type=chunk)[53](index=53&type=chunk) - Nordstrom offers a range of benefits (health care, wellness, financial/retirement plans) and competitive compensation, regularly reviewing and updating its rewards package based on employee feedback[51](index=51&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk) [Corporate Responsibility](index=16&type=section&id=Corporate%20Responsibility) - In 2022, Nordstrom expanded its BEAUTYCYCLE program to Nordstrom Rack, collecting over **25 tons** of beauty packaging waste, and began replacing plastic shopping bags with paper bags[62](index=62&type=chunk) - The company achieved a milestone with almost **50%** of Nordstrom Made products produced in factories offering women's empowerment training, aiming for **90% by 2025**[62](index=62&type=chunk) - Nordstrom donated over **$12 million** to **270+ organizations** in 2022, with employee and customer contributions driving about **$16 million** in nonprofit donations[62](index=62&type=chunk) [Trademarks](index=16&type=section&id=Trademarks) - Notable trademarks include Nordstrom, Nordstrom Rack, Zella, BP., and Treasure & Bond, all renewable indefinitely with continued use in commerce[57](index=57&type=chunk) [Seasonality](index=16&type=section&id=Seasonality) - Nordstrom's business is subject to seasonal fluctuations, with sales typically higher in the second quarter (Anniversary Sale) and fourth quarter (holidays)[58](index=58&type=chunk) - Working capital requirements historically increase before the Anniversary Sale and holidays due to inventory purchases[59](index=59&type=chunk) [Competitive Conditions](index=16&type=section&id=Competitive%20Conditions) - The company operates in a highly competitive retail environment, competing with various international, national, regional, and local retailers, including internet-based businesses[60](index=60&type=chunk) - Key competitive factors include compelling product, outstanding service (digital and in-store), seamless digital and physical experiences, curated products across price points, and strategic brand partnerships[60](index=60&type=chunk) [Available Information](index=16&type=section&id=Available%20Information) - Nordstrom files annual, quarterly, and current reports, proxy statements, and other documents with the SEC, available on SEC.gov and Nordstrom's investor relations website[61](index=61&type=chunk)[63](index=63&type=chunk) - The company has adopted Codes of Business Conduct and Ethics and Corporate Governance Guidelines, available on its website[65](index=65&type=chunk) [Item 1A. Risk Factors.](index=18&type=section&id=Item%201A.%20Risk%20Factors.) Nordstrom faces a broad range of risks that could negatively impact its business, financial condition, results of operations, or reputation. These risks span strategic and operational challenges, data security and IT vulnerabilities, reputation and relationship management, capital allocation, economic and external market conditions, legal and regulatory compliance, and the ongoing impacts of the COVID-19 pandemic - Failure to successfully execute the customer strategy, including the 'Closer to You' initiative, integrating digital and physical assets, and improving Nordstrom Rack performance, could negatively impact business, profitability, and growth[67](index=67&type=chunk)[69](index=69&type=chunk) - The company is vulnerable to shifts in consumer demand, misjudgments in merchandise assortment and timing, and inability to mitigate global labor and merchandise pricing pressures, which could harm profitability[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - Cybersecurity breaches, IT system failures, and disruptions in the global supply chain (including vendor insolvency) pose significant risks to operations, data security, and customer relationships[83](index=83&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Economic downturns, inflation, changes in consumer spending, and the seasonal nature of the business can adversely affect revenues and operating results[105](index=105&type=chunk)[107](index=107&type=chunk) - The wind-down of Canadian operations is expected to incur pre-tax charges of **$300 million to $350 million** in Q1 2023, primarily from investment write-downs, with potential for additional material losses[114](index=114&type=chunk) [Strategic and Operational Risks](index=18&type=section&id=STRATEGIC%20AND%20OPERATIONAL%20RISKS) - Risks include unsuccessful execution of the 'Closer to You' customer strategy, failure to adapt to competitive market forces and changing customer behavior, and inability to manage merchandise strategy and inventory levels effectively[67](index=67&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Profitability is at risk from global labor and merchandise pricing pressures, supply chain disruptions, and increased operating costs[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Challenges in attracting, retaining, training, and developing talent, especially in competitive markets like Seattle, could adversely affect business operations and customer service[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - The program agreement with TD for credit cards, or changes to it, could negatively impact operations, cash flows, and earnings if service levels are not met or terms become less favorable[82](index=82&type=chunk) [Data, Cybersecurity and Information Technology Risks](index=22&type=section&id=DATA,%20CYBERSECURITY%20AND%20INFORMATION%20TECHNOLOGY%20RISKS) - Despite safeguards, security breaches and cyber incidents (internal or third-party) could lead to data loss, unauthorized disclosure, litigation, regulatory actions, financial losses, and reputational damage[83](index=83&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk) - The business relies on efficient internal and third-party IT systems; failures or disruptions could harm operations, reputation, and sales, with disaster recovery plans potentially being inadequate[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) [Reputation and Relationship Risks](index=24&type=section&id=REPUTATION%20AND%20RELATIONSHIP%20RISKS) - Damage to Nordstrom's reputation, including from business practices, privacy, diversity, environmental, or social responsibility issues, could diminish customer trust, weaken vendor relationships, and reduce employee morale[90](index=90&type=chunk)[91](index=91&type=chunk) - Disruptions in the global supply chain, including factory closures, transportation challenges, or vendor insolvency, could result in lost sales, increased costs, and reputational harm[93](index=93&type=chunk)[94](index=94&type=chunk) - The wind-down of Canadian operations may negatively impact relationships with vendors that also supply U.S. operations, potentially leading to less favorable terms or increased costs[92](index=92&type=chunk)[95](index=95&type=chunk) - Concentrated stock ownership by the Nordstrom family (approx. **30%**) may limit other shareholders' influence and could discourage acquisition offers[97](index=97&type=chunk)[99](index=99&type=chunk) [Investment and Capital Risks](index=27&type=section&id=INVESTMENT%20AND%20CAPITAL%20RISKS) - Failure to appropriately manage capital, including changes in credit markets, could increase financing costs, restrict access to liquidity, or lead to noncompliance with debt covenants or credit rating downgrades[100](index=100&type=chunk) - Owning and leasing real estate exposes the company to risks such as decreasing asset values, increasing operating costs, and liabilities for environmental conditions or exit costs[101](index=101&type=chunk) - Investments in existing and new locations, including the 'Closer to You' strategy, may not achieve expected returns, as seen with the Canada business[102](index=102&type=chunk)[103](index=103&type=chunk) [Economic and External Market Risks](index=29&type=section&id=ECONOMIC%20AND%20EXTERNAL%20MARKET%20RISKS) - Revenues and operating results are significantly affected by the seasonal nature of the business and cyclical trends in consumer spending, with any negative impact on key selling seasons disproportionately affecting annual results[105](index=105&type=chunk) - Economic downturns, inflationary periods, increased unemployment, and changes in fiscal stimulus can lead to reduced demand, lower sales, higher markdowns, and increased promotional spending[107](index=107&type=chunk) - The majority of stores are in shopping centers and malls, making the business susceptible to declines in consumer traffic, success of other anchor tenants, and shifts towards e-commerce[108](index=108&type=chunk) - Credit card operations are indirectly subject to economic and market conditions, including interest rates, consumer credit availability, and payment patterns, which can impact revenues and profitability[109](index=109&type=chunk) - Severe weather, natural disasters, pandemics, civil unrest, and other disruptions can cause decreased consumer spending, staffing shortages, supply chain interruptions, and increased costs[110](index=110&type=chunk) [Legal and Regulatory Risks](index=30&type=section&id=LEGAL%20AND%20REGULATORY%20RISKS) - Non-compliance with federal, state, local, and foreign laws, tariffs, and regulations, or changes to them, could result in reputational damage, lawsuits, regulatory investigations, and financial penalties[111](index=111&type=chunk) - Failure to implement or maintain adequate internal controls over financial reporting could lead to unreliable financial reports or fraud, affecting financial position, investor confidence, and stock price[112](index=112&type=chunk) - Changes in accounting rules, interpretations, or underlying assumptions could adversely affect financial performance or position[113](index=113&type=chunk) - The wind-down of Nordstrom Canada's operations carries risks of additional costs and cash outflows if not executed fairly and orderly, and existing reserves may not cover ultimate liabilities[114](index=114&type=chunk) [COVID-19 Risks](index=31&type=section&id=COVID-19%20RISKS) - The COVID-19 pandemic continues to have unpredictable impacts on workforces, customers, economies, and business practices, potentially causing supply chain disruptions, labor shortages, and shifts in consumer behavior[115](index=115&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - The full impact of COVID-19 on longer-term operations, merchandise mix, store traffic, digital demand, and employment relations remains uncertain[116](index=116&type=chunk) [Item 1B. Unresolved Staff Comments.](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) There are no unresolved staff comments to report - No unresolved staff comments were reported[121](index=121&type=chunk) [Item 2. Properties.](index=32&type=section&id=Item%202.%20Properties.) As of January 28, 2023, Nordstrom operated 368 Supply Chain Network and retail locations totaling 33,693 thousand square feet, primarily consisting of leased buildings. The company plans 18 new Nordstrom Rack store openings and one relocation in 2023, and one opening in 2024 Supply Chain Network and Retail Locations (as of Jan 28, 2023) | | Number of locations | Total square footage | | :-------------------------- | :------------------ | :------------------- | | Supply Chain Network | 10 | 6,122 | | Nordstrom | 115 | 18,931 | | Nordstrom Rack | 243 | 8,640 | | **Total** | **368** | **33,693** | Property Ownership/Lease Summary (as of Jan 28, 2023) | | Supply Chain Network | Nordstrom | Nordstrom Rack | Total square footage | | :-------------------------- | :------------------- | :-------- | :------------- | :------------------- | | Leased buildings on leased land | 2 | 34 | 242 | 14,837 | | Owned buildings on leased land | — | 55 | — | 10,062 | | Owned buildings on owned land | 8 | 24 | 1 | 8,250 | | Partly owned and partly leased | — | 2 | — | 544 | | **Total** | **10** | **115** | **243** | **33,693** | - Nordstrom has announced **18 Nordstrom Rack store openings** and **one relocation** in 2023, and **one Nordstrom Rack store opening** in 2024[124](index=124&type=chunk) [Item 3. Legal Proceedings.](index=35&type=section&id=Item%203.%20Legal%20Proceedings.) Nordstrom is subject to various claims and lawsuits in the ordinary course of business, including employment and consumer-based claims, some of which may be class actions. The company believes its accruals are adequate for probable and estimable liabilities. Nordstrom Canada commenced a wind-down of its business operations on March 2, 2023, under the CCAA - The company is involved in various claims and lawsuits, including wage and hour, employment, privacy, and consumer-based claims, some potentially class actions[125](index=125&type=chunk) - Nordstrom Canada commenced a wind-down of its business operations on **March 2, 2023**, under the Companies' Creditors Arrangement Act (CCAA)[126](index=126&type=chunk) - Management does not believe any other currently identified claim or litigation will have a material impact on results of operations, financial position, or cash flows[127](index=127&type=chunk) [Item 4. Mine Safety Disclosures.](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) There are no mine safety disclosures to report - No mine safety disclosures were reported[128](index=128&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.](index=36&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Nordstrom's common stock is traded on the NYSE under 'JWN'. As of March 6, 2023, there were 4,532 record holders and 160.15 million shares outstanding. The company reinstated quarterly dividends in Q1 2022 and repurchased 2.8 million shares for $62 million in 2022, with $438 million remaining in repurchase capacity - Nordstrom's common stock (JWN) is traded on the NYSE, with **4,532 record holders** and **160.1 million shares** outstanding as of March 6, 2023[130](index=130&type=chunk) Historical Dividends Declared and Paid Per Share | Fiscal year | 2022 | 2021 | | :---------- | :--- | :--- | | 1st Quarter | $0.19 | $— | | 2nd Quarter | 0.19 | — | | 3rd Quarter | 0.19 | — | | 4th Quarter | 0.19 | — | | **Full Year** | **$0.76** | **$—** | - Quarterly dividend payments were suspended in Q2 2020 due to COVID-19 and reinstated in Q1 2022[131](index=131&type=chunk) Fourth Quarter Share Repurchases (2022) | | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :------------------------------------ | :----------------------------- | :--------------------------- | :-------------------------------------------------------------------------------- | | November 2022 | 0.01 | $21.76 | $447 | | December 2022 | 0.3 | $17.80 | $442 | | January 2023 | 0.2 | $17.35 | $438 | | **Total** | **0.5** | **$17.72** | | - In 2022, the company repurchased **2.8 million shares** for **$62 million**, with **$438 million** remaining in share repurchase capacity as of January 28, 2023[175](index=175&type=chunk) Cumulative Total Return (Fiscal Year End) | End of fiscal year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | :----------------- | :--- | :--- | :--- | :--- | :--- | :--- | | Nordstrom common stock | $100 | $97 | $83 | $81 | $50 | $44 | | S&P Retail | $100 | $108 | $129 | $183 | $189 | $152 | | S&P 500 | $100 | $100 | $121 | $141 | $168 | $154 | | Nordstrom's peer group | $100 | $116 | $121 | $136 | $146 | $154 | [Item 6. [Reserved]](index=38&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=38&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management's Discussion and Analysis provides a narrative of Nordstrom's financial performance, condition, and results of operations for fiscal year 2022 compared to 2021. It covers an overview of strategic priorities, detailed results of operations, liquidity, capital resources, critical accounting estimates, and recent accounting pronouncements. The company achieved a 5% increase in total net sales in 2022 despite macroeconomic challenges, focusing on improving Nordstrom Rack, inventory productivity, and supply chain optimization - In 2022, total Company net sales increased by **5%** despite challenging macroeconomic conditions[138](index=138&type=chunk) - Net earnings were **$245 million** and diluted EPS was **$1.51** in 2022[138](index=138&type=chunk) - Key priorities for 2023 include improving Nordstrom Rack performance, increasing inventory productivity, and optimizing the supply chain[138](index=138&type=chunk)[139](index=139&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - The company exited 2022 with inventory levels down **15%** due to markdowns, positioning for greater agility[138](index=138&type=chunk) [Overview](index=39&type=section&id=Overview) Fiscal Year 2022 Key Financial Highlights | Metric | 2022 Value | | :-------------------- | :--------- | | Total Company Net Sales Increase | 5% | | Net Earnings | $245 million | | Diluted EPS | $1.51 | | Adjusted EBIT | $502 million | | Adjusted EBIT Margin | 3.3% | | Adjusted EPS | $1.69 | | Inventory Levels (YoY) | Down 15% | - Customer demand decelerated from late June through the holiday season, impacting all customer segments, especially those with lower income profiles[138](index=138&type=chunk) - Acquired approximately **10 million new customers** and **2.5 million new Nordy Club members** in 2022[138](index=138&type=chunk) - Nordstrom Rack initiatives include increasing premium brand supply (**60% of on-order for H1 2023**), expanding new Rack stores (**2 opened in 2022, 20 planned**), and driving digital engagement and profitability[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Net Sales Performance (2022 vs. 2021) (in millions, except percentages) | Fiscal year | 2022 | 2021 | Net Sales Increase (YoY) | | :---------- | :--- | :--- | :----------------------- | | Nordstrom | $10,279 | $9,640 | 6.6% | | Nordstrom Rack | 4,813 | 4,762 | 1.1% | | **Total net sales** | **$15,092** | **$14,402** | **4.8%** | | Digital sales as a % of total net sales | 38% | 42% | (6%) (decrease) | | Nordstrom GMV increase | 6.9% | 39.6% | | | Total Company GMV increase | 5.0% | 40.3% | | - Digital sales decreased by **6% YoY**, negatively impacted by eliminating store-based order fulfillment for Nordstrom Rack digital orders and sunsetting Trunk Club[149](index=149&type=chunk)[150](index=150&type=chunk) - Credit card revenues, net, increased by **$51 million YoY**, primarily due to higher finance charges from larger outstanding balances[152](index=152&type=chunk) - Gross profit increased **$15 million YoY** but decreased **150 basis points** as a rate of net sales (**33.6% in 2022 vs. 35.1% in 2021**) due to higher markdown rates[154](index=154&type=chunk) - SG&A expenses increased **$93 million YoY** but decreased **95 basis points** as a rate of net sales (**33.4% in 2022 vs. 34.4% in 2021**) due to supply chain expense efficiencies, despite a **$70 million impairment charge**[156](index=156&type=chunk) - EBIT decreased **$27 million** and **35 basis points** as a rate of net sales (**3.1% in 2022 vs. 3.4% in 2021**) due to higher markdowns and the supply chain impairment charge, partially offset by efficiencies and higher sales[157](index=157&type=chunk) - Interest expense, net, decreased **$118 million YoY**, primarily due to **$88 million** in debt refinancing charges in 2021 and increased interest income[158](index=158&type=chunk) - Diluted EPS increased **$0.41 YoY** to **$1.51** in 2022, driven by higher net earnings resulting from lower interest expense, despite lower EBIT[160](index=160&type=chunk) Adjusted Financial Measures (2022 vs. 2021) (in millions, except percentages and per share amounts) | Metric | 2022 | 2021 | | :-------------------- | :----- | :----- | | Net earnings | $245 | $178 | | Adjusted EBIT | $502 | $492 | | Adjusted EBITDA | $1,034 | $1,029 | | Net earnings as a % of net sales | 1.6% | 1.2% | | EBIT margin % | 3.1% | 3.4% | | Adjusted EBIT margin % | 3.3% | 3.4% | | Diluted EPS | $1.51 | $1.10 | | Adjusted EPS | $1.69 | $1.51 | | Adjusted ROIC | 7.2% | 7.4% | [Liquidity](index=46&type=section&id=Liquidity) - Ended fiscal year 2022 with **$687 million** in cash and cash equivalents and **$800 million** available on the Revolver, an increase from **$322 million** in 2021[167](index=167&type=chunk) - Net cash provided by operating activities increased by **$241 million YoY** to **$946 million**, primarily due to lower inventory payments and the amended TD program agreement[168](index=168&type=chunk)[170](index=170&type=chunk) - Net cash used in investing activities decreased by **$128 million YoY** to **$393 million**, mainly due to the sale of a corporate office building interest in 2022 and an investment in ASOS.com Ltd. in 2021[168](index=168&type=chunk)[172](index=172&type=chunk) Capital Expenditures, Net Category Allocation (2022 vs. 2021) | Category | 2022 | 2021 | | :-------------------------- | :--- | :--- | | Technology | 66% | 61% | | New stores, relocations, remodels and other | 24% | 22% | | Supply chain | 10% | 17% | | **Total** | **100%** | **100%** | - Capital expenditures as a percentage of net sales decreased in 2022 (**3.1%**) compared to 2021 (**3.5%**), with future expectations of **3% to 4% of net sales**[173](index=173&type=chunk) - Net cash used in financing activities decreased by **$358 million YoY** to **$186 million**, primarily due to net long-term debt activity in 2021, partially offset by dividends paid in 2022[168](index=168&type=chunk)[174](index=174&type=chunk) - Free Cash Flow increased significantly from **$167 million** in 2021 to **$459 million** in 2022[181](index=181&type=chunk) [Capital Resources](index=49&type=section&id=Capital%20Resources) - A new **$800 million Revolver** was established in Q2 2022, expiring in **May 2027**, replacing the prior facility[182](index=182&type=chunk) - As of January 28, 2023, there were no outstanding borrowings under the Revolver or commercial paper program[182](index=182&type=chunk)[301](index=301&type=chunk) Credit Ratings and Outlook (as of March 10, 2023) | | Credit Ratings | Outlook | | :---------------- | :------------- | :------ | | Moody's | Ba1 | Stable | | Standard & Poor's | BB+ | Negative | | Fitch | BB+ | Stable | - The company was in compliance with all Revolver covenants as of January 28, 2023, which include a Leverage Ratio limit of **4x** and a fixed charge coverage ratio of **1.25x**[186](index=186&type=chunk)[297](index=297&type=chunk) - Adjusted debt to EBITDAR was **3.1** as of January 28, 2023[189](index=189&type=chunk) [Critical Accounting Estimates](index=50&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include sales return reserve, The Nordy Club loyalty program and gift cards, merchandise inventories, impairment of long-lived assets, and income taxes[190](index=190&type=chunk) - A **10% change** in the sales return reserve (net of estimated returns asset) would impact EBIT by approximately **$23 million** for FY2022[191](index=191&type=chunk) - A **one percentage point change** in the gift card breakage rate would impact EBIT by approximately **$42 million** for FY2022[192](index=192&type=chunk) - Merchandise inventories are valued at the lower of cost or market using the retail inventory method, with management judgment applied to markdowns and reserves for excess/obsolete inventory[193](index=193&type=chunk) [Recent Accounting Pronouncements](index=53&type=section&id=Recent%20Accounting%20Pronouncements) - The SEC adopted a final rule in December 2022 requiring new disclosures regarding insider trading policies, use of insider trading plans, and executive compensation related to equity awards[201](index=201&type=chunk) - Quarterly disclosure requirements are effective in Q2 2023, and annual requirements in Q4 2023, with no material impact anticipated on results, liquidity, or capital resources[201](index=201&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk.](index=53&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Nordstrom's primary market risks are interest rate risk, mainly affecting the fair value of its fixed-rate long-term debt, and foreign currency exchange risk, primarily impacting Canadian operations. As of January 28, 2023, these risks have not materially impacted the consolidated financial statements, and there have been no material changes in risk exposures or management since the prior year - Interest rate risk primarily affects the fair value of the company's fixed-rate long-term debt, which was **$2,278 million** as of January 28, 2023 (carrying value **$2,856 million**)[202](index=202&type=chunk)[304](index=304&type=chunk) - Foreign currency exchange risk primarily impacts Canadian operations, where sales are denominated in Canadian Dollars and some inventory purchases are in U.S. Dollars[205](index=205&type=chunk) - As of January 28, 2023, foreign currency exchange risk activities have not had a material impact on consolidated financial statements[205](index=205&type=chunk) - No material changes in primary risk exposures or management of market risks have occurred since the prior year[206](index=206&type=chunk) [Item 8. Financial Statements and Supplementary Data.](index=54&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section presents Nordstrom's audited consolidated financial statements, including statements of earnings, comprehensive earnings, balance sheets, shareholders' equity, and cash flows for the fiscal years ended January 28, 2023, January 29, 2022, and January 30, 2021. It also includes the Report of Independent Registered Public Accounting Firm and detailed notes to the financial statements, providing critical accounting policies, revenue disaggregation, and information on debt, leases, and subsequent events - The financial statements include Consolidated Statements of Earnings, Comprehensive Earnings, Balance Sheets, Shareholders' Equity, and Cash Flows for the fiscal years ended January 28, 2023, January 29, 2022, and January 30, 2021[209](index=209&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk)[222](index=222&type=chunk)[224](index=224&type=chunk) - Deloitte & Touche LLP issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting as of January 28, 2023[209](index=209&type=chunk)[210](index=210&type=chunk) - A critical audit matter identified was the timeliness of recording merchandise inventory markdowns, which required a high degree of auditor judgment[214](index=214&type=chunk)[215](index=215&type=chunk) [Consolidated Statements of Earnings](index=58&type=section&id=Consolidated%20Statements%20of%20Earnings) Consolidated Statements of Earnings (in millions, except per share amounts) | Fiscal year | 2022 | 2021 | 2020 | | :------------------------------------------ | :--- | :--- | :--- | | Net sales | $15,092 | $14,402 | $10,357 | | Credit card revenues, net | 438 | 387 | 358 | | **Total revenues** | **15,530** | **14,789** | **10,715** | | Cost of sales and related buying and occupancy costs | (10,019) | (9,344) | (7,600) | | Selling, general and administrative expenses | (5,046) | (4,953) | (4,162) | | **Earnings (loss) before interest and income taxes** | **465** | **492** | **(1,047)** | | Interest expense, net | (128) | (246) | (181) | | Earnings (loss) before income taxes | 337 | 246 | (1,228) | | Income tax (expense) benefit | (92) | (68) | 538 | | **Net earnings (loss)** | **$245** | **$178** | **($690)** | | Earnings (loss) per share: | | | | | Basic | $1.53 | $1.12 | ($4.39) | | Diluted | $1.51 | $1.10 | ($4.39) | | Weighted-average shares outstanding: | | | | | Basic | 160.1 | 159.0 | 157.2 | | Diluted | 162.1 | 162.5 | 157.2 | [Consolidated Statements of Comprehensive Earnings](index=58&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Earnings) Consolidated Statements of Comprehensive Earnings (in millions) | Fiscal year | 2022 | 2021 | 2020 | | :------------------------------------------ | :--- | :--- | :--- | | Net earnings (loss) | $245 | $178 | ($690) | | Postretirement plan adjustments, net of tax | 32 | 18 | (1) | | Foreign currency translation adjustment | (8) | 2 | (1) | | **Comprehensive net earnings (loss)** | **$269** | **$198** | **($692)** | [Consolidated Balance Sheets](index=59&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (in millions) | | January 28, 2023 | January 29, 2022 | | :------------------------------------------ | :--------------- | :--------------- | | **Assets** | | | | Current assets: | | | | Cash and cash equivalents | $687 | $322 | | Accounts receivable, net | 265 | 255 | | Merchandise inventories | 1,941 | 2,289 | | Prepaid expenses and other current assets | 316 | 306 | | **Total current assets** | **3,209** | **3,172** | | Land, property and equipment, net | 3,351 | 3,562 | | Operating lease right-of-use assets | 1,470 | 1,496 | | Goodwill | 249 | 249 | | Other assets | 466 | 390 | | **Total assets** | **$8,745** | **$8,869** | | **Liabilities and Shareholders' Equity** | | | | Current liabilities: | | | | Accounts payable | $1,238 | $1,529 | | Accrued salaries, wages and related benefits | 291 | 383 | | Current portion of operating lease liabilities | 258 | 242 | | Other current liabilities | 1,203 | 1,160 | | **Total current liabilities** | **2,990** | **3,314** | | Long-term debt, net | 2,856 | 2,853 | | Non-current operating lease liabilities | 1,526 | 1,556 | | Other liabilities | 634 | 565 | | **Total liabilities and shareholders' equity** | **$8,745** | **$8,869** | [Consolidated Statements of Shareholders' Equity](index=60&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Consolidated Statements of Shareholders' Equity (in millions, except per share amounts) | Fiscal year ended | January 28, 2023 | January 29, 2022 | January 30, 2021 | | :------------------------------------------ | :--------------- | :--------------- | :--------------- | | **Common stock** | | | | | Balance, beginning of year | $3,283 | $3,205 | $3,129 | | Issuance under stock compensation plans | 29 | 14 | 16 | | Stock-based compensation | 41 | 64 | 60 | | **Balance, end of year** | **$3,353** | **$3,283** | **$3,205** | | **Accumulated deficit** | | | | | Balance, beginning of year | ($2,652) | ($2,830) | ($2,082) | | Net earnings (loss) | 245 | 178 | (690) | | Dividends | (119) | — | (58) | | Repurchase of common stock | (62) | — | — | | **Balance, end of year** | **($2,588)** | **($2,652)** | **($2,830)** | | **Accumulated other comprehensive loss** | | | | | Balance, beginning of year | ($50) | ($70) | ($68) | | Other comprehensive earnings (loss) | 24 | 20 | (2) | | **Balance, end of year** | **($26)** | **($50)** | **($70)** | | **Total** | **$739** | **$581** | **$305** | | Dividends per share | $0.76 | $— | $0.37 | [Consolidated Statements of Cash Flows](index=61&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in millions) | Fiscal year | 2022 | 2021 | 2020 | | :------------------------------------------ | :--- | :--- | :--- | | **Operating Activities** | | | | | Net cash provided by (used in) operating activities | $946 | $705 | ($348) | | **Investing Activities** | | | | | Net cash used in investing activities | (393) | (521) | (347) | | **Financing Activities** | | | | | Net cash (used in) provided by financing activities | (186) | (544) | 530 | | Effect of exchange rate changes on cash and cash equivalents | (2) | 1 | (7) | | Net increase (decrease) in cash and cash equivalents | 365 | (359) | (172) | | Cash and cash equivalents at beginning of year | 322 | 681 | 853 | | **Cash and cash equivalents at end of year** | **$687** | **$322** | **$681** | | **Supplemental Cash Flow Information** | | | | | Cash paid (received) during the year for: | | | | | Income taxes, net of refunds | $211 | ($485) | $23 | | Interest, net of capitalized interest | 136 | 164 | 168 | [Notes to Consolidated Financial Statements](index=62&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - Nordstrom operates on a **52/53-week fiscal year**, with 2023 being a **53-week year**[227](index=227&type=chunk) - Revenue recognition policies include recognizing sales net of estimated returns at shipping point, deferring loyalty program revenue until redemption, and recording gift card breakage revenue based on historical usage[230](index=230&type=chunk)[231](index=231&type=chunk)[234](index=234&type=chunk)[236](index=236&type=chunk) - Contract liabilities increased in 2022 primarily due to deferred revenue from the amended TD program agreement[284](index=284&type=chunk) Disaggregated Net Sales by Merchandise Category (2022 vs. 2021 vs. 2020) | Merchandise Category | 2022 | 2021 | 2020 | | :------------------- | :--- | :--- | :--- | | Women's Apparel | 28% | 28% | 29% | | Shoes | 26% | 25% | 26% | | Men's Apparel | 15% | 14% | 12% | | Accessories | 13% | 14% | 14% | | Beauty | 12% | 12% | 12% | | Kids' Apparel | 3% | 4% | 4% | | Other | 3% | 3% | 3% | | **Total net sales** | **100%** | **100%** | **100%** | - Total vendor allowances increased from **$324 million** in 2021 to **$345 million** in 2022, including purchase price adjustments, beauty expenses, and advertising[247](index=247&type=chunk) - Asset impairment charges in 2022 included **$58 million** for long-lived assets and **$12 million** for ROU assets related to supply chain optimization, and **$10 million** for Trunk Club wind-down[271](index=271&type=chunk)[272](index=272&type=chunk) - Goodwill remained at **$249 million** in 2022 and 2021, with no impairment recognized in 2022, 2021, or 2020[277](index=277&type=chunk) - In Q1 2022, a **$51 million gain** was recognized from the sale of a limited partnership interest in a corporate office building[280](index=280&type=chunk) - Total self-insurance reserves decreased from **$125 million** in 2021 to **$116 million** in 2022[307](index=307&type=chunk) - The Supplemental Executive Retirement Plan (SERP) was underfunded by **$176 million** at the end of 2022, down from **$212 million** in 2021[313](index=313&type=chunk) - Total stock-based compensation expense before income tax benefit decreased from **$79 million** in 2021 to **$59 million** in 2022[320](index=320&type=chunk) - A shareholder rights agreement was adopted in **September 2022**, expiring **September 19, 2023**, to protect shareholder interests by deterring hostile takeovers[330](index=330&type=chunk)[332](index=332&type=chunk) - The effective tax rate decreased slightly from **27.5%** in 2021 to **27.2%** in 2022, primarily due to reductions in non-deductible executive compensation and valuation allowance on foreign losses[159](index=159&type=chunk) - Total purchase obligations were **$1,780 million** as of January 28, 2023, primarily for inventory and capital expenditures, mostly payable within one year[339](index=339&type=chunk) - Nordstrom operates as one reportable 'Retail' segment, aggregating Nordstrom and Nordstrom Rack operating segments due to similar economic and qualitative characteristics[341](index=341&type=chunk)[343](index=343&type=chunk) - On **March 2, 2023**, Nordstrom Canada commenced a wind-down of its business operations, expecting pre-tax charges of **$300 million to $350 million** in Q1 2023, primarily from investment write-downs[348](index=348&type=chunk)[349](index=349&type=chunk) - The Revolver agreement was amended on **March 1, 2023**, to remove Nordstrom Canada Retail, Inc. as a loan party and exclude Canadian entities' CCAA-related expenses from financial covenants[350](index=350&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.](index=88&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) There have been no changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure were reported[351](index=351&type=chunk) [Item 9A. Controls and Procedures.](index=88&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management, including the principal executive officer and interim principal financial officer, concluded that Nordstrom's disclosure controls and procedures were effective as of January 28, 2023. There have been no material changes in internal control over financial reporting during the most recently completed fiscal quarter. Deloitte & Touche LLP attested to the effectiveness of internal control over financial reporting - Disclosure controls and procedures were evaluated and concluded to be effective as of **January 28, 2023**[353](index=353&type=chunk)[354](index=354&type=chunk) - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[355](index=355&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of **January 28, 2023**, with an unqualified attestation report from Deloitte & Touche LLP[357](index=357&type=chunk)[358](index=358&type=chunk)[360](index=360&type=chunk) [Item 9B. Other Information.](index=90&type=section&id=Item%209B.%20Other%20Information.) There is no other information to report under this item - No other information was reported[367](index=367&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](index=90&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections.) There are no disclosures regarding foreign jurisdictions that prevent inspections - No disclosures regarding foreign jurisdictions that prevent inspections were reported[368](index=368&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance.](index=90&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance.) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders. This includes details on corporate governance, director qualifications, and reporting requirements - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Annual Meeting of Shareholders Proxy Statement[370](index=370&type=chunk) - Certifications of the CEO and CFO under Sections 302 and 906 of Sarbanes-Oxley Act are included as exhibits[370](index=370&type=chunk) [Item 11. Executive Compensation.](index=90&type=section&id=Item%2011.%20Executive%20Compensation.) Information concerning executive compensation is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders, covering compensation of executive officers, director compensation, and related committee reports - Information on executive compensation is incorporated by reference from the 2023 Annual Meeting of Shareholders Proxy Statement[371](index=371&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.](index=90&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters.) Details on security ownership of certain beneficial owners and management, along with equity compensation plans, are incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders - Information on security ownership and equity compensation plans is incorporated by reference from the 2023 Annual Meeting of Shareholders Proxy Statement[372](index=372&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence.](index=90&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence.) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders - Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2023 Annual Meeting of Shareholders Proxy Statement[373](index=373&type=chunk) [Item 14. Principal Accountant Fees and Services.](index=90&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services.) Information on principal accountant fees and services is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Shareholders. Deloitte & Touche LLP is the independent registered public accounting firm - Deloitte & Touche LLP is the independent registered public accounting firm[373](index=373&type=chunk) - Information on principal accountant fees and services is incorporated by reference from the 2023 Annual Meeting of Shareholders Proxy Statement[374](index=374&type=chunk) PART IV [Item 15. Exhibit and Financial Statement Schedules.](index=92&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules.) This section lists the financial statements and exhibits filed as part of the report, including the Report of Independent Registered Public Accounting Firm, Consolidated Statements, and various legal and corporate documents - The section includes the Report of Independent Registered Public Accounting Firm, Consolidated Statements of Earnings, Comprehensive Earnings, Balance Sheets, Shareholders' Equity, and Cash Flows[377](index=377&type=chunk) - An Exhibit Index provides a comprehensive list of documents incorporated by reference or filed electronically, including Articles of Incorporation, Bylaws, Indentures, Equity Incentive Plans, and Credit Agreements[378](index=378&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk) [Signatures](index=96&type=section&id=Signatures) The report is duly signed on behalf of Nordstrom, Inc. by Michael W. Maher, Interim Chief Financial Officer and Chief Accounting Officer, and Erik B. Nordstrom, Chief Executive Officer, along with the Board of Directors, as of March 10, 2023 - The report is signed by Michael W. Maher (Interim Chief Financial Officer and Chief Accounting Officer) and Erik B. Nordstrom (Chief Executive Officer) on **March 10, 2023**[382](index=382&type=chunk)[384](index=384&type=chunk) [Consent of Independent Registered Public Accounting Firm](index=97&type=section&id=Consent%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP provides consent for the incorporation by reference of their reports on Nordstrom's financial statements and internal control over financial reporting into various registration statements - Deloitte & Touche LLP consents to the incorporation by reference of their audit reports into Nordstrom's registration statements[385](index=385&type=chunk)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1617 Sixth Avenue, Seattle, Washington 98101 (Address of principal ex ...