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Segment Reporting
 12 Months Ended
Feb. 01, 2020
Segment Reporting [Abstract]  
Segment Reporting
NOTE 16: SEGMENT REPORTING
Segments
We continually monitor and review our segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact our reportable segments. We have one reportable “Retail” segment to align with how management operates and evaluates the results of our operations. Our principal executive officer, who is our CODM, reviews results on a total company, Full-Price and Off-Price basis and uses EBIT as a measure of profitability.
Our Retail reportable segment aggregates our two operating segments, Full-Price and Off-Price. Full-Price consists of Nordstrom U.S. Full-Price stores, Nordstrom.com, Canada, Trunk Club, Jeffrey and Nordstrom Local. Off-Price consists of Nordstrom U.S. Rack stores, NRHL and Last Chance clearance stores.
Our Full-Price and Off-Price operating segments both generate revenue by offering customers an extensive selection of high-quality, brand-name and private label merchandise, which includes apparel, shoes, cosmetics and accessories for women, men, young adults and children. We continue to focus on omni-channel initiatives by integrating the operations, merchandising and technology necessary to be consistent with our customers’ expectations of a seamless shopping experience regardless of channel or business. Full-Price and Off-Price have historically had similar economic characteristics and are expected to have similar economic characteristics and long-term financial performance in future periods. They also have other similar qualitative characteristics, including suppliers, method of distribution, type of customer and regulatory environment. Due to their similar qualitative and economic characteristics, we have aggregated our Full-Price and Off-Price operating segments into a single reportable segment.
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), inter-segment eliminations and other adjustments to segment results necessary for the presentation of consolidated financial results in accordance with GAAP. We allocate Credit assets, loss before interest and income taxes and loss before income taxes to the Retail segment.
Accounting Policy
We present our segment results for all years in the way that management views our results internally, including presenting 2019 and 2018 under the Revenue Standard while prior period amounts are not adjusted. For 2019 and 2018, we generally use the same methodology to compute earnings before income taxes for our reportable segment as we do for the consolidated Company. As a result, for our Retail segment in 2019 and 2018, we defer a portion of underlying sales revenue as customers earn points and Nordstrom Notes in The Nordy Club, based on an estimated stand-alone selling price of primarily points and Nordstrom Notes, and recognize the deferred revenue and related cost of sales when the Nordstrom Notes are ultimately redeemed.
For 2017, prior to the adoption of the Revenue Standard, we estimated the net cost of Nordstrom Notes to be issued and redeemed. We recorded this cost as reward points were accumulated in cost of sales in our total company results. The related Nordstrom Notes expenses were included at face value in the Retail segment. As a result, our Corporate/Other column included an adjustment to reduce the Nordstrom Notes expense from face value to their estimated cost. In addition, the full amount of redemptions of our Nordstrom Notes were included in net sales for our Retail segment. The net sales amount in our Corporate/Other column primarily related to an entry to eliminate these transactions from our consolidated net sales. The impact of these types of adjustments on Retail segment EBIT and Corporate/Other loss before interest and income taxes in 2017 would be immaterial. Other than as described above, the accounting policies of our reportable segment 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 segment:
 
Retail 

 
Corporate/Other

 
Total

Fiscal year 2019
 
 
 
 
 
Net sales

$15,132

 

$—

 

$15,132

Credit card revenues, net
—

 
392

 
392

Earnings (loss) before interest and income taxes
1,028

 
(244
)
 
784

Interest expense, net
—

 
(102
)
 
(102
)
Earnings (loss) before income taxes
1,028

 
(346
)
 
682

Capital expenditures
(726
)
 
(209
)
 
(935
)
Depreciation and amortization
(428
)
 
(233
)
 
(661
)
Assets1
6,831

 
2,906

 
9,737

 
 
 
 
 
 
Fiscal year 2018
 
 
 
 
 
Net sales

$15,480

 

$—

 

$15,480

Credit card revenues, net
—

 
380

 
380

Earnings (loss) before interest and income taxes2
1,059

 
(222
)
 
837

Interest expense, net
—

 
(104
)
 
(104
)
Earnings (loss) before income taxes2
1,059

 
(326
)
 
733

Capital expenditures
(415
)
 
(239
)
 
(654
)
Depreciation and amortization
(436
)
 
(233
)
 
(669
)
Assets
5,300

 
2,586

 
7,886

 
 
 
 
 
 
Fiscal year 2017
 
 
 
 
 
Net sales

$15,408

 

($271
)
 

$15,137

Credit card revenues, net
—

 
341

 
341

Earnings (loss) before interest and income taxes2
1,083

 
(157
)
 
926

Interest expense, net
—

 
(136
)
 
(136
)
Earnings (loss) before income taxes2
1,083

 
(293
)
 
790

Capital expenditures
(516
)
 
(215
)
 
(731
)
Depreciation and amortization
(445
)
 
(221
)
 
(666
)
Assets
5,477

 
2,638

 
8,115


1 In 2019, we adopted the Lease Standard using the transition method provided in ASU 2018-11. See Note 2: Leases for further information.
2 Certain reclassifications were made to 2018 and 2017 amounts to conform with current period presentation, which is the way that management views our results internally.
For information about disaggregated revenues, see Note 3: Revenue.