Nordstrom 2003 Annual Report Download - page 12

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[10 ]
Dear customers, employees and shareholders,
The year 2003 was a pivotal one for our company. Over the last several years, we have
focused on driving sales volume, reducing expenses and upgrading and utilizing new
technology — all to improve service and our bottom-line results. We’ve made considerable
progress on these goals this past year:
• Posted second consecutive year of positive comparable store sales — our best
performance in 9 years
• Monthly same-store sales outperformed our retail peer group for 22
consecutive months
• Improved gross profit 150 basis points for the full year — our best performance
in over 10 years
• Reduced S,G&A for third consecutive year
• Achieved highest net income and earnings per share in company history
As evidenced by our results, we are happy to report that Nordstrom is continuing to move in
the right direction. Our customers are responding favorably to our merchandise mix. We’ve
continued to find ways to manage and reduce expenses that we believe have maintained or
enhanced the quality of our customers’ experience. Plus, we are beginning to take advantage
of systems upgrades to maximize our inventory investment and deliver a fresh stream of
compelling goods to each of our stores.
Perhaps the biggest accomplishment is that we are becoming more disciplined as a
company —while strengthening the foundation that has made Nordstrom so successful. Our
goal has always been to drive volume by doing everything possible to enhance our
customers’ shopping experience. Each of our choices on people, technology, merchandise,
expense and capital investments must enable us to build on our culture and be competitive
into the future.
We’ve always believed that the best approach to this business is to have good people, give
them the tools they need to be successful, then get out of their way and let them compete.
Recently, we have added new technologies that will help our people be more competitive and
better serve the customers as well. One example is our perpetual inventory system. This
technology investment gives our merchants real-time visibility into which items are selling,
so they can fine-tune their merchandise allocations by store. By delivering the right
merchandise mix to each store, inventories turn more quickly, which opens up space for
more fresh goods. Perpetual inventory is beginning to contribute to our results in a
meaningful way. On a comparable basis, inventories per square foot are down over 8% from
last year — and we are just beginning this journey. We need to keep pushing until we can
utilize perpetual inventory to its full potential.
message to shareholders