MacysHewitt

Group 7
KohlsEduardo

Nordstrom- Ashley

Industry Overview
Department
Store
Department store chains
offering multiple lines of
products

trends

Simplicity
Transparency
Social Media
Customer Service

Nordstrom
10.35 billions in market capitalization
61000 employees
242

stores in 31 states

Apparel, Cosmetic, Shoes, Accessories

Retail and Credit are two main business segments

Affordable luxury is target market

25,290,000 square foot

Macys
19.25 billions in market capitalization
171,000 employees
840

Stores in 45 states, 50% are wholly owned

Apparel, Cosmetic, Shoes, Accessories, Home and Miscellaneous

FDS Bank Credit Service, Merchandise Group, IT

& Logistics are subsidiaries
Macys and Bloomingdales brand focus on mid-tier market and
upper-tier market, respectively

150,600,000 square foot

Kohls
11.6 billions in market capitalization
81,000 employees equivalent

1,127 stores
Apparel, Cosmetic, Shoes, Accessories, Home and Miscellaneous

Discount Store
95,000,000 square foot

Income Statement
in millions
Net Sales as Base
Net sales
COGS
Gross Margin
GSA Expense
EBIT
Interest expense, net
EBT
Income tax expense
Net earnings

Nordstrom

Macy

Kohl's

2011

2010

2009

2011

2010

2009

2011

2010

2009

100%

100%

100%

100%

100%

100%

100%

100%

100%

60.6%

60.8%

61.8%

59.6%

59.3%

59.5%

61.8%

61.8%

62.2%

39.4%

39.2%

38.2%

40.4%

40.7%

40.5%

38.2%

38.2%

37.8%

27.9%

27.7%

28.6%

31.4%

33.0%

34.3%

26.7%

26.9%

27.0%

0.0%

0.0%

0.0%

0.1%

-0.1%

-1.7%

0.0%

0.0%

0.0%

11.5%

11.5%

9.7%

9.1%

7.6%

4.5%

11.5%

11.4%

10.8%

1.2%

1.3%

1.6%

1.7%

2.3%

2.4%

1.6%

1.7%

1.8%

10.3%

10.2%

8.1%

7.5%

5.3%

2.2%

9.9%

9.7%

9.1%

4.0%

3.9%

3.0%

2.7%

1.9%

0.8%

3.7%

3.6%

3.4%

6.3%

6.3%

5.1%

4.8%

3.4%

1.4%

6.2%

6.1%

5.7%

Balance Sheets
Nordstrom
ASSETS:
Current assets:
Cash and cash equivalents
Accounts receivable, net
Merchandise inventories
Current deferred tax assets, net
Prepaid expenses and other
Total current assets
Land, buildings and equipment,
net
Goodwill
Other assets(add prepaid exp and
deferred tax asset)
Total assets

2011
22.1%
23.9%
13.5%
2.6%
3.3%
65.5%

Macy's
2011 2010

Kohl's
2010

2010

2009

20.2%
27.2%
13.1%
3.2%
1.1%
64.6%

12.1% 12.8% 7.1% 7.9% 8.5% 15.3% 17.2%

30.9% 1.7% 1.9% 1.7% 0.0% 0.0% 0.0%
13.6% 23.4% 23.1% 21.7% 22.7% 20.4% 22.2%
3.6% 0.0% 0.0% 0.0% 0.5% 0.5% 0.6%
1.3% 2.1% 1.4% 1.0% 2.1% 1.7% 1.7%
61.6% 39.9% 33.4% 32.3% 33.9% 38.0% 41.7%

2009 2011

2009

29.1% 31.1% 34.1% 38.0% 42.7% 44.6% 63.2% 58.5% 53.3%

2.1% 0.7% 0.8% 16.9% 18.1% 17.6% 2.9% 3.5% 5.0%
3.4% 3.6% 3.5% 5.2% 5.7% 5.5% 0.0% 0.0% 0.0%
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Balance Sheet cont.

Nordstrom
Current liabilities:
Accounts payable
Accrued salaries, wages and
related benefits (accrued liability)
Other current liabilities
Total current liabilities
Long-term debt, net
Other liabilities (add deferred
prop incentives)
Total noncurrent liability
Total liability
Shareholders equity:
Common stock& APIC
Retained earnings
Treasury Stock
Accumulated other comprehensive
loss
Total shareholders equity
Total liabilities and shareholders
equity

Macy's

Kohl's

10.8%

11.3%

11.0%

7.2%

6.9%

6.2%

8.7%

7.7%

9.0%

4.6%
15.0%
30.3%
37.0%

5.0%
8.8%
25.2%
37.2%

5.1%
14.5%
30.6%
34.3%

3.5%
17.6%
28.3%
30.0%

2.9%
14.4%
24.2%
33.8%

1.3%
13.5%
20.9%
39.7%

8.0%
1.6%
18.4%
15.2%

6.9%
4.1%
18.7%
10.1%

7.6%
1.5%
18.2%
15.6%

9.6%
46.6%
77.0%

10.5%
47.7%
72.9%

11.2%
45.5%
76.1%

14.9%
45.0%
73.2%

15.2%
49.0%
73.2%

17.5%
57.2%
78.2%

20.3%
35.4%
53.8%

18.3%
28.4%
47.1%

6.6%
22.2%
40.3%

17.5%
6.1%
0.0%

15.7%
11.8%
0.0%

16.2%
8.0%
0.0%

24.4%
18.1%
-11.0%

27.6%
14.5%
-11.8%

26.7%
10.5%
-11.8%

16.6%
72.3%
-42.4%

15.0%
62.6%
-24.5%

15.9%
64.1%
-20.1%

-0.5%
23.0%

-0.4%
27.1%

-0.3%
23.9%

-4.8%
26.8%

-3.5%
26.8%

-3.5%
21.8%

-0.4%
46.2%

-0.2%
52.9%

-0.3%
59.7%

100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Liquidity

5
3

Nordstrom 2.5
Macy's
2

3
2

Kohl's

1.5

0.5

2009 2010 2011

2.5
2
1.5
1
0.5
0

Nordstrom
Macy's
Kohl's

Inventory
Turnover

2009 2010 2011

Current Ratio
Nordstrom

Macy's
Kohl's
2009 2010 2011

Quick Ratio

Long-term Debt Paying

12
10
8
6
4
2
0

Nordstrom
Macy's

4
3

Kohl's

Nordstrom

2
2009

2010

2011

Macy's

Times Interest Earned

Kohl's

0
2009

2010

2011

Debt to Equity

0.8
0.6

Nordstrom

0.4

Macy's

0.2

Kohl's

0
2009

2010

2011

Debt Ratio

Profitability
0.42
0.41
0.4

Nordstrom

0.39
0.38

Macy's

0.37

Kohl's

0.36

0.25

0.2

Nordstrom

0.15

2009

2010

2011

Macy's

0.1

Gross Profit Margin

Kohl's

0.05

0.07

2009

0.06
0.05
0.04

Nordstrom

0.03

Macy's

0.02

Kohl's

2010

Return on Investment

0.01
0

2009

2010

2011

2011

Net Profit Margin

Investor Analysis
500
400

Revenue per
square feet

Nordstrom

300

Macy's

200

Kohl's

100
0

2009

250,000

2010

2011

200,000
150,000

Nordstrom

100,000

Macy's
Kohl's

50,000
2009

2010

2011

Revenue per
employee

Investor Analysis
20

Market Cap

15

(In billions)

Nordstrom

10

Macy's
Kohl's

0
2009

2010

2011

20
15
Nordstrom

10

Macy's

Kohl's

5
0
2009

2010

2011

Price/Earnings

Recommendation Rationale
Nordstrom

Macys

Kohls

Ranking

Net profit Margin

Gross Margin

Inventory Turnover

Current Ratio

Acid Test

Debt Ratio

P/E

Revenues per sqr ft

Rev per employees

Sales growth rate

28

49

37

Post Period
Inventory Turnover
Current Ratio
Acid Test
Times Interest Earned
Debt Ratio
Gross margin
Net Profit Margin
Return on Assets
Market Cap(in billions)

Nordstrom
5.93
2.28
1.53
8.41
0.76
38.82
6.24
8.72
12.23

Macy's
3.17
1.55
0.43
6.26
0.71
40.26
4.82
6.1
19.22

Kohl's
3.54
1.86
0.21
NE
0.56
36.25
5.1
6.93
11.72