SEATTLE — Women’s designer apparel and cosmetics were among the strongest areas for Nordstrom Inc. in a year which resulted in the firm’s strongest same-store sales gain since 1997, shareholders were told at the annual meeting here Tuesday.

With a 1.9 percent increase in fourth-quarter comps, same-store sales finished the year 1.4 percent ahead. Particularly profitable, officials said, was the cosmetics area, which accounts for 13 percent of sales and had a 6.5 percent comp increase last year. Women’s designer apparel advanced 9.3 percent on a comp basis.

Although its systems caused a miscalculation in its estimates of earnings which, as reported, resulted in first-quarter profits coming in well ahead of forecasts, president Blake Nordstrom said the firm’s new perpetual inventory system was helping it to improve efficiencies. Selling, general and administrative expenses as a percentage of sales declined to 30.1 last year from 30.5 in 2001, he noted.

First-quarter earnings per share hit 20 cents versus a May 7 projection of 12 to 15 cents, as reported. In the 2002 quarter, Nordstrom’s lost 18 cents a share, but made 22 cents when special items were excluded.

Blake Nordstrom also addressed the issue of corporate accountability and the expensing of employee stock compensation, saying, “It’s probably not a matter of if, but when and how.”?

Nordstrom also had his own 2002 bonus of $975,000 questioned by a longtime employee and shareholder. William Ruckelshaus, chairman of the compensation and stock option committee, “Blake [Nordstrom] is paid considerably less than his counterparts in our industry.…He actually was entitled to more bonus, but asked for it to be reduced.”

Nordstrom plans to open five full-line stores in 2003 and to maintain its focus on service and selection.

“We’re not going to beat the competition under the one-day only guise or any other short-term approaches,” Blake Nordstrom said. “We can beat them outselling them through superior service and this is our unwavering goal.”

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