Nordstrom(JWN) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for the quarter ended October 28, 2023, were $3,200 million, a decrease of 6.8$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$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$3,709 million as of October 28, 2023, compared to $3,839 million a year earlier, a decrease of 3.4$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$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$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].