Nordstrom 2013 Annual Report Download - page 25

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Nordstrom, Inc. and subsidiaries 25
2014 Outlook
Our expectations for 2014 are as follows:
Total sales 5.5 to 7.5 percent increase
Same-store sales 2 to 4 percent increase
Credit card revenues $0 to $5 increase
Gross profit rate110 to 30 basis point decrease
Selling, general and administrative expenses (% of net sales) 10 to 30 basis point increase
Interest expense, net Approximately $25 decrease
Effective tax rate 39.0 percent
Earnings per diluted share2$3.75 to $3.90
Diluted shares outstanding2Approximately 196 million
1 Gross profit is calculated as net sales less cost of sales and related buying and occupancy costs (for all segments).
2 This outlook does not include the impact of any future share repurchases.
Capital expenditures, net of property incentives, of $840 to $880 million are expected in 2014, an increase from $714 in 2013. The majority of
the increase represents investments to fuel online and Nordstrom Rack store growth in addition to our planned entry into Canada. To date in
2014, we have opened two Nordstrom Rack stores. We plan to open 27 Nordstrom Rack stores and three Nordstrom full-line stores in total
during 2014. In February 2014, we announced our plans to close our full-line stores in Vancouver, Washington, and in Portland, Oregon, at
the Lloyd Center, in January 2015. The planned net store openings are expected to increase our retail square footage by approximately
4.4%.
We expect our planned entry into Canada to decrease earnings primarily due to ongoing infrastructure and pre-opening expenses. The
estimated loss before interest and taxes for Canada is expected to be approximately $35 in 2014, compared with a loss before interest and
taxes of $14 in 2013. This guidance also incorporates Nordstrom Rack’s accelerated store expansion and increased technology investments
to improve service and experience across all channels. These expenses are expected to contribute to our overall increase in depreciation
and rent expense of 14% compared with 2013.
Interest expense, net is expected to decrease primarily due to a one-time charge of $14 related to the debt refinancing transaction in 2013.
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