Segment Reporting

12 Months Ended

Jan. 28, 2017

Segment Reporting [Abstract]

Segment Reporting

NOTE 15: SEGMENT REPORTING

Segments

We have two reportable segments, which include Retail and Credit.

Our Retail segment includes our Nordstrom operating segment, which is comprised of our Nordstrom U.S. full-line stores and Nordstrom.com. Both of these divisions earn revenue by offering customers a wide range of apparel, shoes, cosmetics and accessories for women, men, young adults and children. Through our multi-channel initiatives, we have integrated the operations, merchandising and technology of our Nordstrom full-line and online stores, consistent with our customers’ expectations of a seamless shopping experience regardless of channel. Our internal reporting to our principal executive officer, who is our chief operating decision maker, is consistent with these multi-channel initiatives. Our Nordstrom Rack, Nordstromrack.com/HauteLook, Canadian operations, Trunk Club and Jeffrey operating segments have similar economic and qualitative characteristics, including nature of products, method of distribution and type of customer, or the segment results are not significant to the operating results of Nordstrom. Therefore, the results of these operating segments have been aggregated with our Nordstrom operating segment into the Retail reportable segment.

Through our Credit segment, our customers can access a variety of payment products and services, including a Nordstrom-branded private label card, two Nordstrom-branded Visa credit cards and a debit card for Nordstrom purchases. When customers open a Nordstrom credit or debit card, they also join our loyalty program that provides benefits based on their level of spending.

Amounts in the Corporate/Other column include unallocated corporate expenses and assets (including unallocated assets in corporate headquarters, consisting primarily of cash, land, buildings and equipment and deferred tax assets), sales return reserve, inter-segment eliminations and other adjustments to segment results necessary for the presentation of consolidated financial results in accordance with generally accepted accounting principles.

Total Retail Business represents a subtotal of the Retail segment and Corporate/Other, and is consistent with our presentation in Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations. Total Retail Business is not a reportable segment.

Accounting Policy

In general, we use the same measurements to compute earnings before income taxes for reportable segments as we do for the consolidated Company. However, redemptions of our Nordstrom Notes are included in net sales for our Retail segment. The sales amount in our Corporate/Other column includes an entry to eliminate these transactions from our consolidated net sales. The related Nordstrom Notes expenses are included in our Retail segment at face value. Our Corporate/Other column includes an adjustment to reduce the Nordstrom Notes expense from face value to their estimated cost. In addition, our sales return reserve and other corporate adjustments are recorded in the Corporate/Other column. Other than as described above, the accounting policies of the operating segments are the same as those described in Note 1: Nature of Operations and Summary of Significant Accounting Policies.

The following table sets forth information for our reportable segments:

	Retail		Corporate/Other			Total Retail Business			Credit			Total
Fiscal year 2016
Net sales		$14,768		($270	)		$14,498			$—			$14,498
Credit card revenues, net	—		—			—			259			259
Earnings (loss) before interest and income taxes	1,006		(298		)	708			97			805
Interest expense, net	—		(121		)	(121		)	—			(121		)
Earnings (loss) before income taxes	1,006		(419		)	587			97			684
Capital expenditures	593		249			842			4			846
Depreciation and amortization	456		182			638			7			645
Assets	5,291		2,088			7,379			479			7,858
Fiscal year 2015
Net sales		$14,376		($281	)		$14,095			$—			$14,095
Credit card revenues, net	—		—			—			342			342
Earnings (loss) before interest and income taxes	1,220		(302		)	918			183			1,101
Interest expense, net	—		(112		)	(112		)	(13		)	(125		)
Earnings (loss) before income taxes	1,220		(414		)	806			170			976
Capital expenditures	837		241			1,078			4			1,082
Depreciation and amortization	428		143			571			5			576
Assets	5,460		1,720			7,180			518			7,698
Fiscal year 2014
Net sales		$13,369		($259	)		$13,110			$—			$13,110
Credit card revenues, net	—		—			—			396			396
Earnings (loss) before interest and income taxes	1,382		(261		)	1,121			202			1,323
Interest expense, net	—		(120		)	(120		)	(18		)	(138		)
Earnings (loss) before income taxes	1,382		(381		)	1,001			184			1,185
Capital expenditures	683		172			855			6			861
Depreciation and amortization	393		112			505			3			508
Assets	5,103		1,781			6,884			2,361			9,245

The following table summarizes net sales within our reportable segments:

Fiscal year	2016			2015			2014
Nordstrom full-line stores - U.S.		$7,186			$7,633			$7,682
Nordstrom.com	2,519			2,300			1,996
Nordstrom	9,705			9,933			9,678
Nordstrom Rack	3,809			3,533			3,215
Nordstromrack.com/HauteLook	700			532			360
Off-price	4,509			4,065			3,575
Other retail1	554			378			116
Total Retail segment	14,768			14,376			13,369
Corporate/Other	(270		)	(281		)	(259		)
Total net sales		$14,498			$14,095			$13,110

¹ Other retail includes Nordstrom Canada full-line stores, Trunk Club and Jeffrey boutiques.

The following table summarizes the percent of net sales by merchandise category:

Fiscal year	2016		2015		2014
Women’s Apparel	32	%	31	%	30	%
Shoes	23	%	23	%	23	%
Men’s Apparel	17	%	17	%	16	%
Women’s Accessories	11	%	12	%	14	%
Beauty	11	%	11	%	11	%
Kids’ Apparel	3	%	3	%	4	%
Other	3	%	3	%	2	%
Total net sales	100	%	100	%	100	%