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Earnings Calls: 
Nordstrom Fourth Quarter Earnings Call
Author: Albena Toncheva
123jump.com
Last Update: 4:32 AM EST February 27 2008


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The retailer of specialty apparel and accessories reported revenue of $2.51 billion, down 4.4% from $2.63 billion in the previous year, on 0.7% decrease in same store sales. During the quarter, SG&A improved 68 basis points compared to last year, primarily due to lower incentive costs, partially offset by increased bad debt expense related to the company''s credit card business. Nordstrom, anticipating a weak first half for fiscal 2008, expects EPS in the range of $2.75 to $2.90.


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Source: Company filings    Q1:April  Q2:July  Q3:October  Q4:January
 
Pete Nordstrom: With the marketing spend, we have a plan based on new stores and what we do in it. It baked into our plans for the year. There isn''t anything new or different than what we have been doing for the last several years that''s baked into our histories and how we''ve opened up stores. The one place, where we are probably spending a little bit disproportionate more, it would be in Hawaii just because it''s our first store in that area and it will probably be the biggest single store of all stores, we opened this year. Given the unique dynamics of Hawaii that will have a little bit of large expense to go with it with relates to marketing.

Blake Nordstrom: In terms of the Rack and the multi-channel, we have been coining that out about the last three years as an important initiative within our strategy and it continues to do so for 2008. There isn''t any wholesale change in those plans. Rack, specifically, their growth has been somewhat limited in the last couple of years as we refine that strategy compared to the Full-Line store growth. But we''ll continue to monitor that. The good news with the Rack is it doesn''t require the lead times that the Full-Line stores does to open store. We have a degree of flexibility, but it has been a better part of our business and continues to do so. The multi-channel is a multiyear strategy and the infrastructure continues to come online. Most recently, we doubled the size of the fulfillment center and the call center in Cedar Rapids to be able to handle this growth. There is still probably 18 months to 24 months out before we''re 100% complete in all the infrastructure to try to achieve what we want in terms of being a true multi-channel retailer. But we believe it''s very evident and clear from our customers that that''s what they would like us to be pursuing, and so that''s where our focus and resources are.

Neely Tamminga (Piper Jaffray): What was CapEx expected to be on a gross basis not on a net basis?

Mike Koppel: Our net was 540, and we haven''t broken out at this point that between gross and net.

Neely Tamminga (Piper Jaffray): With respect to fashion, are you seeing newness coming from tops, from bottoms, are you seeing it come from novelty and color print patterns or fabrications?

Pete Nordstrom: Color continues to be important, but we would say they are every time when you are looking to turn the quarter from a winter into spring. For us, its early indications that color have been really good. Crop jackets have been selling well. We''ve, as improvements on bottoms as it relates to non-denim bottoms, and that''s the first time we''ve seen that in a little while, the denim category still continues to be strong but the non-denim fabrications are performing well too.
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