Nordstrom 2010 Annual Report Download - page 34

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26
2011 Outlook
Our expectations for 2011, excluding the impact of our HauteLook acquisition, are as follows:
Same-store sales 2 to 4 percent increase
Credit card revenues $0 to $10 increase
Gross profit rate1 10 basis point decrease to 10 basis point increase
Selling, general and administrative (“SG&A”) expenses:
Retail $120 to $160 increase
Credit $0 to $10 decrease
Selling, general and administrative expense rate2 45 to 65 basis point decrease
Interest expense, net $0 to $5 decrease
Effective tax rate 39.0 percent
Earnings per diluted share $2.95 to $3.10
Diluted shares outstanding 223.3
1Includes both our Retail gross profit and the cost of our loyalty program, which is recorded in our Credit segment, as a percentage of net sales.
2Selling, general and administrative rate is calculated as SG&A expense for the total company as a percentage of net sales.
We plan to open three Nordstrom full-line stores and seventeen Nordstrom Rack stores and relocate two Nordstrom Rack stores during 2011. This will
increase our retail square footage by approximately 4.3%.
We expect our gross profit rate to remain approximately flat in 2011, after the significant improvement experienced in 2010.
The majority of the increase in our Retail SG&A expenses relates to our expectations for increased variable expenses consistent with the planned
increase in sales, to additional expenses from stores opened during 2010 and 2011, and to strengthening our capabilities to enable continued
improvement in the customer experience.
For our Credit segment, we expect a slight increase in credit card revenues as a result of increased volume, offset by higher payment rates. We expect
Credit SG&A expenses to be flat to down slightly when compared with 2010 results, which included $45 of reductions in our allowance for credit losses.
Interest expense, net is anticipated to be flat to down slightly due primarily to lower borrowing facility fees.