Nordstrom Allocates $2.4B for Stores

The $3 billion in capital expenditures was recently approved by Nordstrom's board of directors for the 2008 through 2012 fiscal years. The company--which opened three stores in the third quarter in Natick, MA, Novi, MI and Denver, plus a Nordstrom Rack store in Tukwila, WA—now operated 157 stores located in 28 states. It plans to open eight new stores and relocate one in 2008.

President Blake Nordstrom said during Monday's earnings conference call that the $3 billion capital commitment is the highest in the company's history and "we believe, represents the highest value use of our shareholders' money." Our core customer base is growing and we are committed to keeping "a laser-like focus on giving customers a well-edited selection of luxury and quality brands." Nordstrom noted that the company continues to grow its presence in top markets, with stores in 44 of the top 55 US markets and plans to be in 51 of those markets by 2011.

In addition to the 80% of the $3 billion committed to new stores and remodelings, Nordstrom plans to invest about 10% of the capital budget on technology. The remaining 10% will go toward general and maintenance purposes.

For the third quarter ended Nov. 3, Nordstrom reported net income of $165.7 million and 68 cents per share, compared with $135.7 million and 52 cents per share in the third quarter last year. This year's third-quarter results included $20.9 million, net of tax, or nine cents per share, for the sale of the Faconnable business.

The company's total sales in the third quarter increased by 5.3% to $1.97 billion compared with third-quarter sales last year. Third quarter same-store sales increased 2.2%.