Nordstrom(US:JWN)2020-03-20 21:06Financial Position - Long-term debt amounts to $2,676 million, with a fair value of $2,905 million as of February 1, 2020[189]. - Total assets increased to $9,737 million as of February 1, 2020, up from $7,886 million in the previous year[212]. - Cash and cash equivalents total $853 million, generating interest income at variable rates[190]. - Cash and cash equivalents decreased to $853 million from $957 million in the prior year[212]. - Total current liabilities rose to $3,520 million, an increase from $3,381 million in 2018[213]. - The company reported net cash provided by operating activities of $1,236 million, down from $1,296 million in 2018[217]. - Total vendor allowances decreased from $457 million in 2017 to $418 million in 2019, with specific allowances for cosmetic expenses, purchase price adjustments, and advertising[241]. - The company reported a benefit obligation of $224 million at the end of 2019, up from $190 million in 2018, indicating an underfunded status of $224 million[298]. - Long-term debt as of February 1, 2020, was $2,676 million, a slight decrease from $2,685 million in the previous year, with total due beyond one year remaining at $2,676 million[303]. - Interest expense, net for 2019 was $102 million, down from $104 million in 2018, reflecting a decrease in interest on long-term debt and short-term borrowings[305]. Revenue and Earnings - Net sales for fiscal year 2019 were $15,132 million, a decrease of 2.2% from $15,480 million in 2018[210]. - Net earnings for fiscal year 2019 were $496 million, down 12.1% from $564 million in 2018[211]. - Earnings per share (EPS) for fiscal year 2019 were $3.20, compared to $3.37 in 2018, reflecting a decrease of 5.1%[210]. - Earnings before income taxes for 2019 were $682 million, a decrease from $733 million in 2018, with U.S. earnings at $654 million[329]. - The effective tax rate for 2019 was 27.3%, compared to 23.1% in 2018, influenced by state and local income taxes[331]. - The company reported a total current income tax expense of $134 million for 2019, down from $203 million in 2018[329]. - Retail segment net sales for fiscal year 2019 were $15,132 million, a decrease from $15,480 million in 2018, representing a decline of 2.2%[344]. - Earnings before interest and income taxes (EBIT) for the Retail segment in 2019 were $1,028 million, down from $1,059 million in 2018, a decrease of 2.9%[344]. - Gross profit for the Retail segment in fiscal year 2019 was $5,200 million, compared to $5,325 million in 2018, a decrease of 2.3%[346]. - The company reported net earnings of $496 million for fiscal year 2019, down from $564 million in 2018, a decline of 12.1%[346]. - Earnings per diluted share for fiscal year 2019 were $3.18, compared to $3.32 in 2018, a decrease of 4.2%[346]. Capital Expenditures and Investments - Capital expenditures for fiscal year 2019 were $935 million, an increase from $654 million in 2018[217]. - Capital expenditures for the Retail segment in 2019 totaled $726 million, significantly higher than $415 million in 2018, an increase of 74.9%[344]. - The company incurred $60 million in net non-cash investing activities for capital expenditures primarily related to Nordstrom NYC and the Supply Chain Network in 2019[292]. - Estimated total purchase obligations, primarily for capital expenditures and inventory, were $1,618 million as of February 1, 2020[315]. Store Operations and Market Presence - The company has six Nordstrom Full-Line Stores (FLS) and six Nordstrom Rack stores in Canada, with revenues and expenses primarily in U.S. Dollars[192]. - The company announced a temporary closure of stores in response to COVID-19, which may materially impact business operations in 2020[223]. - The company opened its NYC flagship store in October 2019, with related building and equipment assets placed into service by the end of the third quarter[316]. Inventory and Merchandise - The company’s merchandise inventories are valued using the retail inventory method, with markdowns significantly impacting inventory valuation[203]. - Merchandise inventories are valued at the lower of cost or market value, with adjustments made for markdowns based on demand and trends[256]. Financial Reporting and Controls - The company’s internal control over financial reporting was found to be effective as of February 1, 2020[196]. - The company adopted the Lease Standard in 2019, impacting the reporting of operating leases on the Consolidated Balance Sheet[258]. - The company adopted the Lease Standard in 2019, implementing a new lease accounting information system and modifying internal controls over lease accounting[351]. Stock and Shareholder Information - Share repurchases in 2019 totaled 4.1 million shares at an average price of $45, amounting to $186 million[317]. - The company paid dividends of $1.48 per share for the years 2017, 2018, and 2019, with a quarterly dividend of $0.37 declared in February 2020[318]. - Total stock-based compensation expense before income tax benefit was $69 million in 2019, down from $90 million in 2018, with a net expense of $51 million after tax benefits[322]. - The company issued 2.1 million shares of common stock under stock-based compensation plans in 2019, with 9.5 million shares authorized under the 2019 Plan[319]. - The company had 8.3 million stock options outstanding at the end of 2019, with an aggregate intrinsic value of $132 million[327]. - As of February 1, 2020, total unrecognized stock-based compensation expense related to nonvested stock options was $10 million, expected to be recognized over 35 months[327]. Risk Factors - The company is exposed to interest rate risk primarily from changes in short-term interest rates, affecting interest income and expense[190]. - The company may use forward contracts to hedge against fluctuations in foreign currency prices, although these did not have a material impact on financial statements as of February 1, 2020[191]. - The company’s Canadian operations can be affected by foreign currency fluctuations, impacting gross profit[192].