http://www.morningstar.com/earnings/16535857-nordstrom-inc-jwn-q2-2010.aspx

Nordstrom Inc JWN
Q2 2010 Earnings Call Transcript

Transcript Call Date 08/12/2010

Operator: Hello, and welcome to the Nordstrom 2010 Second Quarter Conference Call. At the request of Nordstrom, today’s conference call is being recorded. All lines will be on a listen-only mode until the question-and-answer session.

I will now introduce Rob Campbell, Treasurer and Vice President of Investor Relations for Nordstrom. You may begin, sir.

Robert E. Campbell - Treasurer and VP, IR: Good afternoon, everyone and thank you for joining us. Today’s earnings call will last approximately 45 minutes, and will include about 30 minutes for your questions.

As a reminder, all forward-looking statements on this call are subject to risks and uncertainties that could cause the Company's actual results to differ materially from the expectations and assumptions discussed due to a variety of factors that affect the Company, including the risks specified in the Company's most recently filed Forms 10-Q and 10-K.

Participating in today's call are Blake Nordstrom, President of Nordstrom, Inc.; and Mike Koppel, Executive Vice President and Chief Financial Officer, who will discuss the Company's second quarter 2010 performance and outlook for the remainder of 2010.

Now, I will turn the call over to Blake.

Blake W. Nordstrom - President: Thanks, Rob. Good afternoon, everyone. I wanted to let you know that both Pete and Erik Nordstrom had previous commitments that prevent them from being on this call today, so Mike and I will do our best in our remarks and in the Q&A session to address any questions you may have at this juncture.

On behalf of our team, we feel we had a solid second quarter and the first half of the year has exceeded our expectations. We're particularly encouraged by our sales results and how the customer is responding to our merchandise and services. Our merchants continue to strive to have an offering that is compelling with fresh, fashionable goods, while also striving to provide us seamless, multi-channel shopping experience.

July typically represents the second highest sales month of the year, reflecting the impact of the anniversary sale. It was a great event overall. Throughout the event, we offered a quality mix of merchandise with strong brand names at attractive prices that resonated with our customers. We also benefited from having a shared inventory platform for both our full-line and Direct channels, including having more anniversary sale items in our direct fulfillment center, which allowed us to better fulfill customer demand. This helped us achieve an anniversary event, multi-channel same-store sales increase of 9%.

For some time now we worked hard to maintain strong disciplines in both inventory management and SG&A. Some of you may recall that last year at this time we found ourselves slightly below our plans on inventory and we were chasing a few things. As the first half of the year progressed, our merchants made some adjustments to their inventory plans for the Anniversary Sale that in aggregate was closer to our peak performance from 2007. So though we had a very good performance with a 9% comp store gain, our actual inventory came in a little higher. We have been very forthcoming about how critical the content, balance, and quantity of our inventory is to our bottom line results. While we continue to be very disciplined with our overall inventory management, we do recognize there are some pockets that need some adjustments. We are able to address this very quickly.

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