JWN Investor Presentation March 2014

8/12/2019 JWN Investor Presentation March 2014

1/35

INVESTOR PRESENTATIOMarch 2014


2/35

This presentation contains statements that are forward looking. These statebased upon current expectations and assumptions that are subject to risks

uncertainties. We may not achieve the results projected in these forward-lo

statements, and our actual results could materially differ because of factors

in this presentation, and in the risk factors section of our Form 10-K, Form

and other reports and filings with the Securities and Exchange Commission

Company undertakes no obligation to update or revise any forward-looking

statement to reflect subsequent events, new information or future circumst

FORWARD-LOOKING STATEMENTS


3/35

Our financial moddiversified mix of overarching goalsline growth and mmoved from four interconnected ex

continue to evolvIn addition, we arbase for both Fulstores. In the nexthat half of our saRack and online. investments in e-drive higher salescustomers and grdeliver higher retcompany average

As our customer expectations evolve, were

changing and broadening our touchpointsstrategically. Today, Nordstrom is an integratedretailer serving customers through four distinctyet complementary businesses: in store full-price(Nordstrom full-line stores), in store off-price

(Nordstrom Rack stores), online full-price(nordstrom.com) and online off-price (HauteLookand soon nordstromrack.com). Each businessrepresents a doorway to the Nordstromexperience and a meaningful growth opportunityindividually. And together they contribute to ourability to attract and retain customersnow andin the future. This is important because we knowour most engaged customers shop with us inmultiple channels and give us a greater share oftheir discretionary dollars. Currently, Nordstrom isthe only retailer that can serve customers acrossall these channels.

We always try to leave our customers feelinggood by providing compelling merchandise andthe best experience possible, no matter how theyshop with us. Though its easier said than done in

todays rapidly changing landscape, we believe

we have the team, capabilities and customer

strategy to make it happen. Ever since ourfounding, our success has been defined byempowered, knowledgeable and motivatedpeople dedicated to serving customers. That willnever change.

At Nordstrom weve always aspired to do one thing well: serve our customer in an exceptional way. Weve founwhen we let the customer be our guide. This approach has served us well, driving our strategy and leading to ssuccess. Our goals are simple: to serve our customers better, to always be relevant in their lives and to form lif

while serving our customer face-to-face is the foundation and hallmark of how weve historically served them,service in new ways. Speed, convenience, innovation and personalization have become cornerstones of the cu

by these needs, we continue to invest in the cross-channel experience, combining the accessibility of a pure onhigh-touch inclusivity of our stores. Each channel is meaningful, but we recognize the customer doesnt view ucustomer sees us simply as Nordstrom, and ultimately its by taking a One Nordstrom approach that we can

SUSTAINABLEGROWTH STRATEGY

SUPERIORCUSTOMER EXPERIENCE FINA


4/35

INVESTMENT HIGHLIGHTSWE ARE A 113 YEAR OLD GROWTH COMPANY

SUPERIORCUSTOMER

EXPERIENCE

SUSTAINABLEGROWTH

STRATEGY

STRONGFINANCIAL

MODEL

in achanging world

driving multiplegrowth

opportunities

evolving withgoal of top

quartile returns


5/35

SUPERIOR CUSTOMER EXPERIENCE

SUSTAINABLE GROWTH STRATEGY

STRONG FINANCIAL MODEL


6/35

#1 GOAL: SUPERIOR CUSTOMER EXPERIENC2013 PROGRESS ON STRATEGIC PRIORITIES

FUELED ONLINEGROWTH

EXPANDED SELECTION

IMPROVED FULFILLMENT

SERVED MORECUSTOMERS

IN 41 FUSTO

3 CONSECUTIVE YEARS

~30%DIRECT SALES

GROWTH

ENHANCED MOFF

12%RACKSALES

GROWTH

22NEW

STORES


7/35

COMPETITIVE POSITIONINGSERVING CUSTOMERS THROUGH MULTIPLE CHANNELS

STORES ONLINE

OFF-PRICE

FULL-PRIC

E

nordstromrack.c
http://www.google.com/imgres?imgurl=http://www.northernnevadajobs.com/upload_files/images/thumbs/jcpenney_logo1248455298.gif&imgrefurl=http://www.northernnevadajobs.com/profile/167?cat=1&usg=__R8tA3gEwBt7WNnxL-HZ8YQwssHI=&h=75&w=200&sz=10&hl=en&start=13&sig2=et2H4xiBB3DhWoOTFDQ7Mg&zoom=1&itbs=1&tbnid=YQBjGcjOquFhNM:&tbnh=39&tbnw=104&prev=/search?q=jcpenney+logo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=A8QUTpjtKKb-sQKh0u3UDwhttp://www.google.com/imgres?imgurl=http://davidgaines.com/images/stock/shopping/dsw.jpg&imgrefurl=http://davidgaines.com/tag/columbia-heights-dc&usg=__iXUcWtCqeQb1hk1Ol_t7AEitnek=&h=104&w=125&sz=6&hl=en&start=1&sig2=a_ACnRNru2sKvuEENQnggQ&zoom=1&itbs=1&tbnid=2YFaZravW3FvOM:&tbnh=75&tbnw=90&prev=/search?q=dsw+logo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=er8UTumPNobfgQf1taX-BAhttp://www.google.com/imgres?imgurl=http://i447.photobucket.com/albums/qq193/FrugalPlus/Shopping/Tjmaxx_logo.png&imgrefurl=http://www.hisstank.com/forum/g-i-joe-toys-modern-general-discussion/51784-25th-roc-joes-tj-maxx.html&usg=__WlTHrGG0J9B56y-BUqFlwvHNYDQ=&h=106&w=414&sz=99&hl=en&start=3&sig2=fivXIjPEXk3UVH9RJHbvjw&zoom=1&itbs=1&tbnid=G-wOe6zgCZex4M:&tbnh=32&tbnw=125&prev=/search?q=tjmaxx+logo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=Q78UTv6KKsrZgAfnoqX-BAhttp://www.google.com/imgres?imgurl=http://blogs.reuters.com/shop-talk/files/2008/08/ross_logo.gif&imgrefurl=http://blogs.reuters.com/shop-talk/2008/08/20/bad-news-for-you-good-news-for-us/&usg=__5nV8Sdl1XK8Oq3oEHZqsZT4zTds=&h=71&w=160&sz=3&hl=en&start=2&sig2=vbIVBHK653npC8mfUwFQnA&zoom=1&itbs=1&tbnid=iqlD11bQoRk_tM:&tbnh=43&tbnw=98&prev=/search?q=rosslogo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=p74UTq2JOYfogQeBvdz9BAhttp://www.google.com/imgres?imgurl=http://www.live-love-life.org/wp-content/uploads/2011/06/Bloomingdales-logo_0.jpg&imgrefurl=http://www.live-love-life.org/photos/&usg=__Uu9DElX01RlVJMTgsxvM6M0euqU=&h=470&w=3000&sz=154&hl=en&start=2&sig2=cbxSUUvz72lOlRN_-_r9cQ&zoom=1&itbs=1&tbnid=MCiTFBuuzIN1EM:&tbnh=24&tbnw=150&prev=/search?q=bloomingdales+logo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=pcQUTqSyNcKqsAKk2OTUDwhttp://www.google.com/imgres?imgurl=http://www.stpatrickcenter.org/wp-content/uploads/2010/06/dillards-logo.jpg&imgrefurl=http://www.stpatrickcenter.org/events/benefits-for-spc/&usg=__es0ef2DBVxYzLRoJ0Dn8UQ90rGY=&h=139&w=242&sz=8&hl=en&start=4&sig2=1fNoUTwPvkpiJkFXqkPLfQ&zoom=1&itbs=1&tbnid=AW0jb0r-mW_wkM:&tbnh=63&tbnw=110&prev=/search?q=dillards+logo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=isQUTrmXCIivsALEwvHUDwhttp://www.google.com/imgres?imgurl=http://bargainbriana.com/wp-content/uploads/macys_logo.png&imgrefurl=http://bargainbriana.com/macys-online-sale-clearance-save-25-75-plus-99-shipping&usg=__zu27bH4ySzIaxYt1lRZc6LsKbek=&h=504&w=419&sz=17&hl=en&start=3&sig2=KNhsj_b3s01kZJHoty5CAg&zoom=1&itbs=1&tbnid=WcMEsXnEiMutfM:&tbnh=130&tbnw=108&prev=/search?q=macyslogo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=cMQUTrScLcHosQLRk-XUDwhttp://www.google.com/imgres?imgurl=http://dealiciousfinds.com/wp-content/uploads/2011/01/Kohls-Logo.bmp&imgrefurl=http://dealiciousfinds.com/online-shopping/hot-kohls-30-off-code-free-shipping-kohls-cash/&usg=__RRFLUlp3fDREqes9kSoYr4-tDfM=&h=374&w=1579&sz=1732&hl=en&start=2&sig2=m_M2vT9DR6Rdh0QC6MbV8g&zoom=1&itbs=1&tbnid=NyWDPLWcSNxIWM:&tbnh=36&tbnw=150&prev=/search?q=kohls+logo&hl=en&rlz=1T4GGLL_enUS384US384&biw=1260&bih=835&tbm=isch&ei=XcQUTvu1Gu-DsgKHvtnUDwhttp://www.google.com/imgres?imgurl=http://karlasugar.net/wp-content/uploads/2010/06/Saks-logo.jpg&imgrefurl=http://karlasugar.net/2010/06/i-love-saks/saks-logo/&h=376&w=500&sz=37&tbnid=NS3XwOIDdXN0nM:&tbnh=98&tbnw=130&prev=/search?q=saks+logo&tbm=isch&tbo=u&zoom=1&q=saks+logo&usg=__VnFwu7roGdkqBHolbeldrVKCHdE=&sa=X&ei=bWRFT7CCLcX-sQL7iITDDw&ved=0CBkQ9QEwAw


8/35

CUSTOMER-CENTRIC STRATEGYGROWTH ENABLED THROUGH MULTI-CHANNEL SYNERGIES

nordstrom.com

OURCUSTOMER

FULL-PRICE

OFF-PRICE

STORES ONLINE

nordstromrack.com


9/35

MULTI-CHANNEL SYNERGIESSERVICE, PRODUCT, TECHNOLOGY, MARKETING

nordstrom.com

OURCUSTOMER

SERVICE &EXPERIENCE

NORDSTROMREWARDS

SINGLE INVENTORYVIEW

MOBILEFASHIONAUTHORITY

MERCHANDISE RETURNS

STOREFULFILL


10/35

MULTI-CHANNEL CUSTOMERINCREASING CUSTOMER LIFETIME VALUE

3-4x

MULTI-CHANNELCUSTOMER SPENDS

MORE THAN

SINGLE CHANNELCUSTOMER


11/35

MULTI-CHANNEL SYNERGIESENABLED BY TECHNOLOGY

2003

2003

2009

Website Revamp

Wi-Fi in All Stores

One Inventory Platform

International Shipping

Social Community

Website Access at POS

Direct to Customer

Buy Online, Pickup In Store

MULTI-CHANNELFOUNDATION

CUSTOMER

EXPERIENCE

2011-2012

Private Sale

Enhanced Mobile Website

Mobile POS Devices

Free Shipping & Returns


12/35

MULTI-CHANNEL SYNERGIESENABLED BY LOYALTY

2X MORE TRIPS3X MORE SPEND

3.8M ACTIVE MEMBERS,13% INCREASE FROM LY

1 MILLION NEW ACCOUNTS

38% CARD PENETRATION,UP FROM 36% LY

NORDSTROM REWARDS

AS OF FY 2013


13/35

MULTI-CHANNEL SYNERGIESENABLED BY STRATEGIC PARTNERSHIPS


14/35





15/35


16/35

FULL-LINE: MODERATING GROWTHINCREASING RELEVANCE

117 STORES

ANNOUNCEOPENINGS INCLUDING

STORE REIN

DRIVEN BY EXPERIENC

RELEVANT - SERVICE- PRODUC

- ENVIRON

PL

SOUTHERNCALIFORNIA22 STORES

NORTHERNCALIFORNIA12 STORES

NORTHWEST14 STORES

SOUTHWEST14 STORES

SOUTHEAST13 STORES

CAPITAL14 STORES

MIDWEST16 STORES

NORTHEAST12 STORES

STORE COUNT AS OF FEB 1, 2014


17/35

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014E

2015E

2016E

RACK: ACCELERATING GROWTHSERVING MORE CUSTOMERS

140 STORES

PLANS TO R~230 STORE

47 OF TOP 5FULL-LINE B

ULTIMATE THUNT EXPE

FASTER CHFROM MOB

PL

STORE COUNT

~230

140

STORE COUNT AS OF FEB 1, 2014

49


18/35

ONLINE: AGGRESSIVE GROWTHSTRIVING TO BE THE BEST-IN-CLASS ONLINE

STRATEGICPILLARS

CUSTOMEREXPECTATIONS

2013PROGRESS

SELECTION INCREASED BREADTH

AND DEPTH

ACHIEVED PARITY WITHSTORES IN 2012

30% INCREASE INSELECTION IN 2013

EXPANDEKEY BRA

CONVENIENCE

EASY TO SHOP

FAST DELIVERY

25% OF ONLINE SALESFROM MOBILE/TABLET

FASTER CLICK TO FULFILL

INTEGRASTORE E

FASTER F

EXPERIENCE PERSONALIZATION / FIT50% INCREASE INPRODUCTRECOMMENDATIONS

INCREASPERSONA


19/35

CANADA: INTERNATIONAL GROWTHEXPANDING TO NEW MARKETS

6 ANNOUNCSTORE OPE

$1B SALES P- 8-10 FUL

- 15-20 RA

BUILDINGINFRASTRU

PL

CALGARY

CHINOOK CENTRE(FALL 2014)

OTTAWA

RIDEAU CENTRE(SPRING 2015)

VANCOUVER

PACIFIC CENTRE(FALL 2015)

TORONTOEATON CENTRE (FALL 2016)

YORKDALE SHOPPING CENTRE (FALL 2016)SHERWAY GARDENS (SPRING 2017)

ANNOUNCED STORE COUNT AS OF FEB 1, 2014


20/35

2014 EXPECTED MILESTONESGROWTH AND EXECUTION

STORES ONLINE

OFF-PRICE

FULL-PRIC

E

OPENING 27RACK STORES

IMPROVING ONEXPERIENC

EXPANDED SELEINCREASED PERSONA

OPENING 3FULL-LINE STORES

CALGARY, CANADAJACKSONVILLE, FL

HOUSTON, TX

LAUNCHINGnordstromrack.com


21/35





22/35

2013 HIGHLIGHTSEXECUTING ON GROWTH STRATEGY

REFER TO APPENDIX FOR RECONCILIATION OF ROIC (NON-GAAP FINANCIAL MEASURE)

SALE

$12B

ROIC

13.6%

EPS

$3.71EXCEEDED PRIOR

OUTLOOK$3.65 TO $3.70

WHILE INCREASINGCAP EX BY +50%

RECORDPERFORMA


23/35

LONG-TERM FINANCIAL GOALSGROWTH AND RETURNS LEADING TO TOP-QUARTILE TSR

SALES ($B) ROIC (%)


YOY% (6) 0 13 13 12 3

8.3 8.3

9.3

10.5

11.8 12.2

2008 2009 2010 2011 2012 2013

11.6

12.1

13.6

13.3

2008 2009 2010 2011


24/35

STRONG EXECUTIONRECORD SALES PRODUCTIVITY AND EBIT

SALES PER SQUARE FOOTTOTAL COMPANY AND 4-WALL

EBIT ($M)

779834

1,118

1,249

2008 2009 2010 2011

388

368

397

431

470 474

360

337

372

397

417408

2008 2009 2010 2011 2012 2013

NOTE: 4-WALL INCLUDES FULL-LINE AND RACK STORES


25/35

2009 2010 2011 2012 2013

BALANCED CAPITAL ALLOCATIONRETURNING VALUE TO SHAREHOLDERS

1.3 1.2 1.2 1.1 1.3 CASH FLOW FRO

$0.7B CAP EX

$0.2B DIVIDENDS

$0.5B SHARE REPUR


26/35

5 YEAR CAPITAL PLANALIGNING CAPITAL INVESTMENTS WITH GROWTH

NEXT 5 YEARS (FY14-1

$3.9B

LAST 5 YEARS (FY09-13)

$2.2B

NEW STORES0.5

CANADA/MANHATTAN

0.1

TECHNOLOGY0.5

REINVEST1.1

NEW STORES0.9

CANADA/MANHATTAN

0.9

TECHNOLOGY1.2

REINVEST0.9

NOTE: NEW STORES INCLUDE RELOCATIONS AND TECHNOLOGY INCLUDES FULFILLMENT


27/35

LONG-TERM SALES GROWTHMULTIPLE GROWTH DRIVERS

STORES ONLINE

OFF-PRICE

FULL-PRICE

FULL-LINE62%OF SALES

RACK22%OF SALES

DIRECT13%OF SALES

HAUTELOOK3%

OF SALES

NEXT S

~50EXPECRACK A

GOALS

HIGSAL

MID

MODERATING GROWTHEntry into Canada & Manhattan

AGGRESSIVE GROWTHImproving online experience

AGGRESSIVE GROWTHLeverage capabilities

ACCELERATING GROWTHStore growth in U.S. & Canada

% OF SALES BASED ON FY 2013 RETAIL NET SALES


28/35

EVOLVING FINANCIAL MODELINVESTMENTS FUELING GROWTH AND RETURNS

CRACKONLINE

ASTO

$1PO

INF& PCO

~230STORES BY 2016FROM 140 IN 2013

HIGH EBITMARGIN

NEW STOREDYNAMICS

FASTESTGROWING BUSINESS

HIGH EBITGROWTH

TECHNOLOGY &FULFILLMENT

FULL-LINE

PRODUCTIVITY &STOREENVIRONMENT

MODERATINGGROWTH

COREOF NORDSTROM

BRAND

CONSIDERATIONS

OPPO

RTUNITY


29/35

$12.2B

13.6%

$57

ACCELERATINGRETURNS

RECESSION/RECOVERY

FUELINGGROWTH & RETURNS

LONG-TERM PROFITABLE GROWTHGOALS: HIGH SINGLE-DIGIT SALES GROWTH & MID-TEENS

ROIC

SALES

2004 - 2007 2011 - 2013 NEXT 5 Y2008 - 2010


STOCK PRICE (Y/E)


30/35

VALUE CREATIONRETURNING VALUE TO SHAREHOLDERS

HIGH SINGLE-DIGIT

SALES GROWTH MID-TEENS ROIC

TOTAL SHAREHOLDER RETURN CALCULATED AS OF JANUARY 31, 2014

LONG-TERMFINANCIAL GOALS

14%

38%

3 YR 5 YR

TOTAL SHAREHOLDER

S&P 500 NORD


31/35

2014 OUTLOOKEPS OF $3.75 TO $3.90

OUTLOOK EXCL. CANADA**

YOY GROWTH % LOW HIGH LOW HIGH

TOTAL SALES 6 8 5 7

NET EARNINGS 0 4 2 6

EBITDAR * 4 6 4 7

EBIT 0 3 1 5

* EBITDAR PRESENTED TO EXCLUDE DEPRECIATION AND RENT, WHICH ARE IMPACTED BY GROWTH INVESTMENTS. REFEBITDAR RECONCILATION (NON-GAAP FINANCIAL MEASURE)

** EXCLUDES EBIT LOSS RELATED TO CANADA OF ~($35M) ESTIMATED IN 2014 AND ($14M) IN 2013


32/35

APPENDIX


33/35

NORDSTROM, INC.

NET EARNINGS TO EBITDAR (NON-GAAP FINANCIAL MEASURE)


34/35

( )(unaudited; amounts in millions)

Earnings before interest, income taxes, depreciation, amortization and rent ("EBITDAR") removes the impact of our cur rent growth-related initiatives including contiinvestments in e-commerce and technology, and entrance into new markets such as Manhattan and Canada. Removing these types of expenditures gives us a consisteour core performance against prior periods as well as in comparison to our competitors. In addition, we regularly review EBITDAR as part of our Adjusted Debt to EBmeasure as disclosed in our Q4 2013 earnings release.

EBITDAR is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for, net earnings or other financial accordance with GAAP. EBITDAR does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, including leasnecessary to pay interest and principal on our debt. Our method of determining non-GAAP financial measures may differ from other companies methods and therefo

those used by other companies. The financia l measure calculated under GAAP which is most direc tly comparable to EBITDAR is net earnings. The following is a recEBITDAR:

12 fiscal months ended

Canada Impact

2014 Guidance 2014 G

2013 LOW HIGH 2013 LOW

Net earnings $ 734 $ 737 $ 766 $ 734 $ 737

Add: income tax expense 455 471 490 455 471

Add: interest expense 161 136 136 161 136

Add: Canada loss - - - 14 35

Earnings before interest and income taxes (EBIT)/Adjusted EBIT 1,350 1,344 1,392 1,364 1,379

Add: depreciation and amortization1

462 514 514 462 514

Add: rent expense 125 147 147 125 147

Less: Canada depreciation, amortization and rent - - - - (5)

EBITDAR/Adjusted EBITDAR $ 1,937 $ 2,005 $ 2,053 $ 1,951 $ 2,035

Year over Year Growth

Net earnings/Adjusted net earnings 0% 4% 2%

EBIT/Adjusted EBIT 0% 3% 1%

EBITDAR/Adjusted EBITDAR 4% 6% 4%

1

Amortization includes the amortization of intangib le assets and non-cash acquisition charges.

NORDSTROM INVESTOR RELATIONS


35/35

CONTACT

INFO

NORDSTROM INVESTOR RELATIONS1301 2ndAVE, SEATTLE, WA [email protected]

ROB CAMPBELLTREASURER & VICE PRESIDENT, [email protected]

TRINA SCHURMANDIRECTOR, INVESTOR RELATIONS

[email protected]

LACY FITZPATRICKSENIOR INVESTOR RELATIONS [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

Documents

JWN Investor Presentation March 2014