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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (29369)	12/23/2007 2:20:59 PM
From: - with a K	Respond to of 78753

Yes, JWN debt has gone up since it announced an additional $1.0 billion in share repurchase to bring the total authorization to $2.5 billion. Some will feel it is a risky move and JWN needs to be careful with its debt ratios. Operating margins declined last quarter but operating cash flow remains positive. Demand for the company’s products and services has been strong as sales for the last quarter grew 5.25% rising to $1.97 billion. S&P: Annual earnings at JWN were positive for the last five years and consistently increased through the period. JWN employs a capital structure that appears to be appropriate for companies in the Department Stores group and has no problem servicing debt payments. Its capital resources total $2.8B, of which 77.5% is equity and 22.5% is attributed to debt. JWN does a better job of collecting its accounts receivable than any other company in the Department Stores group. In 2007, the average number of days its accounts receivable were outstanding was 46. However, this was 0.8 days slower than the accounts receivables collection during the previous year. JWN generates more sales from the use of its assets than nearly any other company in the Department Stores group. This is evidenced by its 2007 Total Asset Turnover of 1.8x. During Fiscal Year 2007, JWN spent $264.4M on capital expenditures. This amount represented a steady decrease in spending over the last four years. During 2007, JWN earned $962.5M from its investing activities. News Snips: Going against the grain of currently gloomy forecasts for the economy, Nordstrom said on Monday that it plans to add "a moderate amount of leverage" in advance of increasing its share-repurchase program by $1 billion. The upscale department store chain asserted that it has a greater capacity for debt, citing its strong credit-card business and the generally under-leveraged position of its balance sheet relative to operating cash flows. In less forboding economic times, of course, it's widely considered a good idea for companies with little debt to take on some additional borrowing if they can handle it. But with some economists forecasting a recession in the early part of next year, this is a curious time for a cyclical company to consider adding debt. Nordstrom, however, is planning to set up a new balance-sheet leverage target. It believes the new target will lower its weighted average cost of capital and still support its credit rating. ******************** Posted Dec 20th 2007 2:02PM Nordstrom Inc. (NYSE: JWN) is a leading U.S. fashion retailer, with outlets in 28 states. The firm operates 101 full-line stores, 51 Nordstrom Racks, two Jeffrey boutiques, one free-standing shoe store and two clearance facilities. It also serves customers through catalogs and a web site. The stock has been a steady gainer recently, rising on such developments as better than expected Q3 earnings/revenues, upside guidance for Q4/FY08 EPS, favorable analyst remarks, much better than expected November same-store sales, and word of insider buying. The news has kept JWN shares cycling through a positive six-week trading channel.