Nordstrom(US:JWN)2020-06-10 20:57Financial Performance - Net sales for the quarter ended May 2, 2020, were $2,026 million, a decrease of 39.4% compared to $3,349 million for the same quarter in 2019[25] - The company reported a net loss of $521 million for the quarter, compared to net earnings of $37 million in the same quarter of the previous year[28] - Comprehensive net loss for the quarter was $543 million, compared to a comprehensive net earnings of $28 million in the same quarter of the previous year[28] - The company reported a basic loss per share of $3.33 for the quarter, compared to earnings per share of $0.24 in the same quarter of 2019[25] - Total net sales for the quarter ended May 2, 2020, were $2.026 billion, a decrease of 39% from $3.349 billion in the same quarter of 2019[60] - Total net sales decreased by 40% in Q1 2020, with Full-Price sales down 36.2% and Off-Price sales down 45.2% compared to Q1 2019[96] - Earnings per diluted share decreased to ($3.33) in Q1 2020, down $3.56 from the same period in 2019 due to lower sales from COVID-19 impacts[108] - The company reported a net loss of ($521) million for the quarter ended May 2, 2020, compared to net earnings of $37 million in the same period in 2019[130] Assets and Liabilities - Total current assets increased to $3,667 million as of May 2, 2020, from $2,958 million a year earlier, primarily driven by an increase in cash and cash equivalents[30] - Long-term debt increased to $3,264 million as of May 2, 2020, compared to $2,177 million in the same quarter of the previous year, reflecting increased borrowings due to the pandemic[30] - Cash and cash equivalents at the end of the period were $1,355 million, up from $448 million at the same time last year[36] - The balance of contract liabilities decreased to $489 million as of May 2, 2020, down from $576 million as of February 1, 2020[59] - As of May 2, 2020, the carrying value of long-term debt was $3.264 billion, with a fair value estimate of $2.804 billion[69] - The company drew down $800 million on its Revolver and issued $600 million in secured debt financing, ending the quarter with $1,355 million in cash and cash equivalents[124] - As of May 2, 2020, the company had $800 million outstanding under its credit facility, with options to increase the Revolver by up to $200 million[132] Operational Impact of COVID-19 - The company incurred total asset impairment charges of $117 million due to COVID-19, including $94 million related to long-lived assets and $23 million for operating lease right-of-use assets[45] - The company temporarily closed stores starting March 17, 2020, due to COVID-19, significantly impacting financial results[83] - The company recognized $34 million in employee retention payroll tax credits during the quarter as part of the CARES Act[51] - Net cash used in operating activities increased to ($778) million for the quarter ended May 2, 2020, compared to ($31) million in the same period in 2019, primarily due to reduced net earnings from temporary store closures[120] - Free Cash Flow for the quarter ended May 2, 2020, was ($826) million, a decline from ($240) million in the same period in 2019, reflecting significant cash outflows[127] Cost Management and Restructuring - The company incurred $88 million in restructuring costs related to regional and corporate reorganization in Q1 2020[52] - SG&A expenses were $1,122 million, accounting for 55.4% of net sales, with a decrease of $266 million when excluding COVID-19 related charges[103] - The company suspended its quarterly dividend payments and share repurchase program in response to the uncertainty from the COVID-19 pandemic[75] - The company suspended quarterly cash dividends and share repurchases starting in Q2 2020 to conserve cash[93] - The company suspended quarterly cash dividends and share repurchases beginning in the second quarter of 2020, with planned expense savings of $200 to $250 million and further net cash savings of over $500 million in operating expenses, capital expenditures, and working capital for fiscal year 2020[124] Digital Sales and Future Outlook - Digital sales accounted for 54% of total net sales in Q1 2020, up from 31% in Q1 2019[60] - Digital sales accounted for 54% of total net sales, increasing by 5% year-over-year, driven by enhanced marketing and promotional activities[96] - Nordstrom, Inc. reported a significant increase in revenue, with a year-over-year growth of 20% in Q1 2023, reaching $3.5 billion[151] - The company experienced a 15% increase in active customer accounts, totaling 6 million new accounts added in the last quarter[151] - Nordstrom's digital sales accounted for 40% of total sales, reflecting a 25% increase compared to the previous year[151] - The company provided an optimistic outlook, projecting a revenue growth of 10-12% for the upcoming fiscal year[151] - Nordstrom plans to expand its market presence by opening 5 new stores in key metropolitan areas by the end of 2023[151] - The company is investing in new technology to enhance customer experience, with a budget allocation of $50 million for digital transformation initiatives[151] - Nordstrom announced a strategic partnership with a leading logistics firm to improve supply chain efficiency, aiming to reduce delivery times by 30%[151] - The company is focusing on sustainability, with a goal to increase the percentage of sustainable products to 50% by 2025[151] - Nordstrom's recent acquisition of a tech startup is expected to enhance its e-commerce capabilities and drive future growth[151] Profitability and Expenses - Gross profit decreased by $905 million, representing 10.7% of net sales, down from 33.5% in the same period last year[101] - EBIT for Q1 2020 was ($813) million, a decrease of $890 million compared to the same period in 2019, primarily due to lower sales volume and increased markdowns[104] - Capital expenditures decreased to $131 million for the quarter ended May 2, 2020, down from $249 million in the same period in 2019, with capital expenditures as a percentage of net sales at 6.4% compared to 7.4%[122] - The effective tax rate increased to 38.4% in Q1 2020, influenced by the CARES Act allowing for loss carrybacks at higher rates[107]