Michael Koppel - Chief Financial Officer, Executive Vice President Blake Nordstrom - President Peter Nordstrom - President of Merchandising R. J. Jones - Manager, Investor Relations

Deborah Weinswig - Citigroup/Smith Barney Bob Buchanan - A.G. Edwards Michael Exstein - CS First Boston Michelle Pen - UBS Barbara Wyckoff - Buckingham Research Group Stacy Turnof - Merrill Lynch Dana Cohen - Banc of America Securities Christine Augustine - Bear Stearns Jennifer Black Richard Jaffe - Stifel Nicolaus & Company, Inc Neely J. N. Tamminga - Piper Jaffray Operator: Hello, and welcome to the Nordstrom’s first quarter 2006 Earnings Release Conference Call. (Operator Instructions) I would like to introduce Mr. R.J. Jones, Manager of Investor Relations for Nordstrom’s. You may begin. R. J. Jones: Good afternoon, everyone, and thank you for joining us on the call today. On the line with me this afternoon are Blake Nordstrom, President of Nordstrom, Inc.; Pete Nordstrom, President of Merchandising; and Mike Koppel, Executive Vice President and Chief Financial Officer. This afternoon, Mike will lead off with a review of our first quarter results, Blake will make a few concluding remarks and then we will open it up for questions. Please note that any forward-looking statements we make in our remarks this afternoon should be considered in conjunction with the cautionary statements contained in our SEC filings. Now I will turn the call over to Mike. Mike Koppel: Thanks, R.J., and good afternoon, everyone. We are pleased to report another quarter of improving operating performance. For the first quarter, earnings per share increased 26% to $0.48 cents, versus $0.38 cents per share last year and ahead of expectations. Our pre-tax margin rose to 11.9%, 140 basis points higher than last year. Top line results consistently exceeded our low single-digit same-store sales plan, which drove incremental leverage on both the gross profit and the operating expense lines of the P&L. Net income for the quarter was $131.2 million, compared to $104.5 million last year, also a 26% increase. Sales momentum built throughout the quarter, with all of our geographic regions and most major merchandise categories posting same-store sales increases. Total sales grew 8% to $1.8 billion, and same-store sales increased 5.4%. Our strongest regional performances were in the southern States and northwest, and our best performing merchandise divisions were accessories, cosmetics and men’s apparel. The 40 basis point increase in gross profit for the quarter was ahead of the company’s expectations. Merchandise margin versus last year was flat, which was in line with our plans. We experienced over plan markdowns in women’s apparel that were offset by strong sales in margins across other major categories. Above planned sales leverage on buying and occupancy expense created the rate expansion. This expansion was partially offset by an addition $3 million due to stock option expense, which had a 15 basis point impact on our gross profit rate. As for SG&A, we gained 48 basis points of rate improvement versus the prior year. Variable expenses were in line with sales growth. Rate improvement was driven by better-than-planned fixed costs, as well as leverage on above-planned sales. SG&A also includes $4 million in stock option expense, which had a 25 basis point impact on the SG&A rate. Credit card revenue, which is included in the other income line in the P&L, increased $7.5 million for the quarter as a result of growth in our co-branded Visa card program. In addition, the increase in other income benefited from gift card breakage and foreign exchange gains totaling $3.6 million combined. Net interest expense of $10.8 million was $1.9 million better than last year, primarily due to higher interest income. We repurchased 5.3 million shares of stock during the quarter, for a total of $213 million, exhausting the remaining balance on our most recent authorization. The resulting reduction in weighted average shares outstanding was not significant enough to impact earnings per share this quarter. Inventory levels were in line with sales, resulting in an improvement in our turnover of 6% for the quarter. On a comparable basis, total ending inventory per square foot was flat with last year. Total debt at quarter end was $932 million and total capital was $3 billion, resulting in a debt to total cap ratio of 31.5%, compared to 35.2% at this time last year. As we have discussed previously, our current dividend policy aims to maintain a payout ratio of 18% to 20%, and a yield that is approximately 1%. Our quarterly dividend of $0.105 cents currently meets these target ranges. As we consider our strategic options for deploying capital, we are fortunate to be in a position of flexibility. During the quarter, Standard & Poor’s raised our long-term debt ratings from A- to A, based on their positive appraisal of the strength of our balance sheet and operating model. In light of this upgrade, we continue to review our capital structure. In October this year, our $300 million private label securitization will mature. In spring of 2007, our second securitization of $200 million, which is currently off balance sheet, will mature as well. We are evaluating alternatives to combine these two separate financings. As part of that review, we are looking at the possibility of increasing leverage on the co-branded Visa and private label credit card portfolio. There are several possible uses for the cash generated by these alternatives, and we will be reviewing each of them diligently to determine the most appropriate course of action. We will be providing updates as we progress. Now, I would like to discuss our plans for disclosing the company’s progress on return on invested capital, or ROIC. Over the past three years, we have used ROIC as an internal measure to assess our performance. In 2005, it became an incentive element for our executive leadership team. ROIC is an important, long-term matrix supporting our efforts to create shareholder value, and we believe it is important to share our progress. Beginning with our first quarter 2006 10Q, we will be providing this metric along with the appropriate reconciliation, consistent with red G guidelines. Our updated earnings outlook for the full year is $2.24 to $2.32 per share, up from $2.15 to $2.23 per share. Including the $0.06 impact of stock option expense in this year’s figures, this represents a 13% to 17% year over year increase. Our low, single-digit same store sales expectation is unchanged for the remainder of the year. Back in February when we gave our initial outlook for the year, we included all of our stock option expense in SG&A. Our merchant team are recipients of stock option grants and as such, the related expense is recorded as part of buy-in costs. In our recently filed 10K for 2005, we updated our projection for classification of stock option expense, with components recorded in both buying and occupancy, and SG&A. As a result, improvement in gross margin is now estimated to be 10 to 20 basis points for the year, down from our original expectation of 25 to 35 basis points. Our initial SG&A annual expense outlook was for 30 to 40 basis points of improvement on a comparable basis, and flat year over year, after including options. We now expect SG&A expense rate improvement of 50 to 60 basis points versus last year, including option expense, due to both sales leverage on fixed expenses and a shift of 40% of our expected option expense into gross profit. Other income is anticipated to increase $30 million to $35 million, and interest expense is assumed to improve $7 million to $9 million. For the second quarter, we are planning low single-digit same-store sales, and expect earnings in the rage of $0.59 to $0.64 cents per share. Now I will turn the call over to Blake for some additional remarks. Blake Nordstrom: Thanks, Mike, and good afternoon, everyone. Before opening it up for questions, I would like to make a few comments on this past quarter and give an update on a few things we are focusing on this year. We are pleased to report the results of the first quarter, which show steady progress toward our goal of both increasing same-store sales and improving operating efficiencies. By controlling expenses and leveraging above-planned sales, our SG&A expense rate fell to 27.7%, which is the third consecutive year of expense rate decline in the first quarter. While we continue to believe there is room to improve, it is moving in the right direction. Our top priority continues to be to gain market share by earning more of our customers’ spend in the categories of merchandise we offer, and to increase our presence where our customers shop. At the center of our strategy is our unwavering commitment to continuously enhance the experience that each customer has in our stores. Success for us will always begin and end with how well we connect with our customers by offering compelling merchandise combined with personalized service. Our sales people continue to use personal book to improve upon and develop more one-on-one customer relationships. Our merchants continue to leverage perpetual inventory tools to make better-informed buying decisions. As we gain more insight over time, we are able to focus our resources in a way that is most meaningful to our target customers. Along these lines, women’s apparel represents an opportunity for us to gain market share. After combining subjective feedback from the sales floor with objective demographic information about our customers, we identified a strategy to better meet our customer’s style, price, fit and occasion needs. Pete Nordstrom has previously outlined adjustments we made to our women’s leadership structure in order to facilitate more streamlined decision-making. Currently, our women’s team is finalizing merchandise plans for the fall season based on this strategy. We are excited about the upside potential that lies ahead in our women’s business, and look forward to keeping you informed as things start to develop in the back half of the year. Through our website and catalogs, we make every effort to strengthen our relationship with our customers by giving them increased access to us. Multi-channel shoppers continue to be our most loyal customers. The two- to three-year process to integrate our online and full-line store inventory systems is ongoing to create a more seamless shopping experience. Designer merchandise has been an essential part of our offering as a fashion specialty retailer for a long time now. We define our designer business as carrying the most aspirational and coveted brands at the very top of the luxury scale. While elements of designer are present in all of our full-line stores, we are working to enhance our apparel, footwear and accessories, offering in roughly a quarter of our stores. The importance of designer merchandise to our customers and our stores cannot be understated in terms of creating inspiration and excitement for newness across all categories. Competitively and financially, we remain well-positioned for new store growth. Many expansion opportunities continue to arise in the retail landscape for us, and we will evaluate each of them individually for their strategic fit and return potential. We regularly review our dividend and share repurchase programs with a commitment to maximizing shareholder value. With the completion of our most recent $500 million authorization, we look forward to discussing future repurchase considerations with our board. As we open the call up for questions, on behalf of the team at Nordstrom, we would like to take this opportunity to extend our heartfelt appreciation to our retiring board members. We would like to thank Al Osborn for his 18 years of valuable service as a member of the board. We would also like to thank John and Bruce Nordstrom, both 40-year plus members of the board, and part of the third generation of the Nordstrom family, for their dedicated service to customers, employees and shareholders. The advice and guidance from the board of directors is valued by all of us. The executive team and the board will continue to reach out to our retiring board members as a resource as the company moves forward. With that, we would like to answer any questions you may have. Operator: Thank you. Our first question comes from Deborah Weinswig. Deborah Weinswig - Citigroup/Smith Barney: Thank you, and congratulations on a great quarter. Should we look at your comp guidance for the second quarter as conservative, based on your most recent quarterly comps? Or is there something we should figure into the second quarter that would be specifically impacting it? Mike Koppel: You know, our guidance on comps has been very consistent with the way we shared it in the past. We have shared what our internal plans are and how we manage the business. That is the way we are going to continue to do it. Then, as we release the monthly sales, I would encourage you to monitor our performance against that, and that should be an indicator of the direction the quarter should head to. Deborah Weinswig - Citigroup/Smith Barney: Okay, I wanted to make sure I wasn’t missing anything there. Can you also provide us with an update on markdown optimization, which I believe you went live with at the end of October. What has been different, positively and negatively? Mike Koppel: Well, at this point, I think we are still going through a fairly deep learning process. Our business has a number of different categories to it, and each category is unique. We have found in some areas that it has helped us make better decisions, and in other areas we are still learning how to maximize the use of the tools, so I would say at this point it is still a work in progress. Operator: Thank you. Our next question comes from Bob Buchanan. Bob Buchanan - A.G. Edwards: I just want to extend my appreciation to Bruce for the tremendous job he has done for your company over the years. There just couldn’t be a finer operator, so my appreciation to him. Mike Koppel: Thank you, we will relay that to him. Bob Buchanan - A.G. Edwards: Well, thank you. He is a good guy and he has brought up three good sons. Let me just ask, with regard to Jeff Colinski and the whole evolution, upscale, more-toward-designer price points, if you could just update us with how that important initiative is going. Pete Nordstrom: Sure, this is Pete. We have always been in the designer business. I think it would be incorrect to perceive that with the addition of Jeffrey on board, that something really changed. But what we have been able to do with Jeffrey there is create a lot more focus around the agenda and make sure we are lining up better across categories. We would have maybe a designer in a shoe department but not in an apparel department, or so on, across multiple different stores. What we try to do is identify more succinct number of stores that across all categories, we have a very credible designer offering. Jeffrey has helped us in a lot of ways. It has really been terrific working with him. He is great in the market. He has good relationships. There has been some help there. He also has a fantastic eye, just purely as a buyer. He has great instincts as a merchant, and he’s really good at the selling part of the business. We have actually had him in our stores working with our sales people, literally doing selling type seminars, if you will. That has been extremely valuable as well. I think all of our people in the different merchandising areas that get to work with him, and mostly that is in the designer parts of the business, are really embracing his input. He is a great partner for us and I think has enabled us to continue to move forward. Bob Buchanan - A.G. Edwards: Sounds good. I also wanted to ask, on the customer service regard -- so important, along with trend identification and item merchandising. I know the Personal Book has helped you there. Just an update as to what some of the initiatives are to take you guys even from your level to the next level in terms of taking care of that customer. Blake Nordstrom: Do you want me to take that one, Mike? Mike Koppel: Blake, please. Blake Nordstrom: We have had really good success with Personal Book, and again I think it has allowed us to be a little bit more scientific in our approach to customer data, and just do it in a more consistent, fool-proof way. So many of our sales people that are aggressive about this have really embraced the technology, so you can see individual performances in many cases has really improved quite a bit. I think our main focus there, aside from just being comfortable with using the new tools, which I think we have made a lot of progress on, is on now literally being able to track the improvements and productivity, and not just amongst the people that have embraced it or are already the high achievers, but literally across the board in our company. So I think we have dialed up the expectations and how we are holding people accountable for just pure productivity. We are encouraged by where that has taken us so far. Bob Buchanan - A.G. Edwards: Okay, thanks again.

Thank you. Our next question comes from Michael Exstein. Michael Exstein - CS First Boston: Good afternoon, gentlemen, just following up on what Bob said. I think it was incredibly classy what you did in terms of spotlighting the departing directors, so I think that is terrific. In terms of business, I understand strategically why you’d want to go after the designer business, but I guess when we watch some companies that are very heavily designer skewed, it’s sometimes pretty tough to create a profitable model. I am wondering how you are sort of doing the see-saw between the image and the profitability that is inherent in that push?

It’s all about balance. We’re not radically changing the percentage of our total business have done any businesses. We are just improving it and making it better and improving the profitability and the synergy there. We experiencing some growth that is outpacing some of the rest of our categories, but I don’t think it would be fair to say that we’ve changed the collective balance of our offering. We really haven’t. I think we’ve just been able to be more focused on whatever the agenda is. So I understand what you’re saying. We are definitely mindful of that. We know that we need to deliver results, so nothing that we’re working on in merchandising is at all at odds in compromising our quest for outcomes and results. Michael Exstein - CS First Boston: I am not doubting that for a minute. I’m just interested in how you’re going to balance that and how broad you want to make the initiative long term.

Well, I think the customer is going to determine that. As we offer more goods to the customer, they’ll react. So far, and I’m sure we’re not the only retailer, you’ve seen a lot of acceptance and desire by the customer, and I’m talking about a large amount of customers that are interested in this kind of product. So we’ve had a lot of success there, and that’s why we’ve applied energy to it. As time goes on, we will continue to adjust as the customer demands adjust, but it will always have a really solid place in our overall offering. All I can speak to again is the balance and making sure that we’re nimble enough to react that way. Michael Exstein - CS First Boston: I assume the vendors are more than embracing them?

Well, yes, I think that for the most part. There’s always some caution there too. I think all those luxury vendors realize that a lot of the demand for the product is because there’s scarcity of supply, and you can’t buy it everywhere. I think to their credit, they want to make sure if they are going to open any retailer with this, that they want to make sure it’s in an environment that shows their product well, that it is being sold and presented by salespeople that are professional and know what they’re doing, and that we can as a company make a long-term commitment. There is a fair amount of loyalty that goes into being in that business, because there are up and down seasons. We’re earning the confidence and trust as we go along, and we’re encouraged by the progress we’ve made. Michael Exstein - CS First Boston: Right, thanks so much.

Thank you. Our next question comes from Michelle Tan. Michelle Tan - UBS: Hey guys, just a couple of questions. First, on the full-year guidance, taking it up by $0.09, is that really just the first quarter beat and then the share repurchase coming early? Mike Koppel: Yes, it’s primarily the results from the first quarter and maintaining our operating plans for the remainder of the year. Michelle Tan - UBS: Okay, great. Then, just looking at some of the consolidation that’s going on in the market, have you seen any benefits yet in the northeast from some of the uncertainty with some of your competitors there? Mike Koppel: In terms of store performance? Michelle Tan - UBS: Yes. Mike Koppel: At this point, I wouldn’t say that there is a difference that’s causing a noticeable impact to our business in the northeast at this point. Michelle Tan - UBS: Ok, great, thank you. Then just one final question. On the changes that you’ve talked about in the women’s assortment, is there anything specific that you can point us to at this stage for what we should start looking for in the stores as we get closer to the fall season? Thank you very much.

Yeah, I don’t think so, because I think to explain it in that way might imply that there are more dramatic changes happening than really are necessary. It’s a pretty subtle evolution. I think what we’ve been able to do is quantify much better the size of the price with the market share and the different constituencies that we’re going after with the customer groups that we’re serving. So it takes a while for these things to change. We just at the beginning of the year have implemented the team and the structure to be able to execute against the strategy that we’re working on. So as you know, there’s going to be several months down the road until those buys are able to be changed in any measurable way. I think as we get closer to it and we actually have some results to talk about, that might be the appropriate time to speak to it. All I can say is on the whole, all this is done in the spirit of how we can improve our business and our market share with our core customers. Michelle Tan - UBS: Great, thanks guys.

Thank you. Our next question comes from Barbara Wyckoff. Barbara Wyckoff - Buckingham Research Group: Hi, everyone, great quarter. Can you talk about the junior and the contemporary business, Brass Plum and tbd, tough comparisons coming up, denim, Juicy, those kinds of classifications. How are you planning to manage through the shifts in fashion? Do you see anything on the horizon that could be of the same magnitude as these kinds of businesses?

Well, businesses have been still relatively stronger compared to the other businesses. The contemporary segment in particular there has been pretty strong for us. I think you’re right. There are some things we’re going to be going against, but that’s the beauty of women’s fashion. It evolves and it changes, and as other things become outdated, new things become important. The whole trick for us is to make sure our inventory positions are in a place where we can react and respond to that, that we have buyers that are out there in the market and they’re experts at it and they’re able to identify trends. So coming into the scenes we talk about all the time, and while we don’t nail it perfectly, it definitely is a cultural aspect of our company and what we’re trying to do and be able to be nimble with that. I really don’t have a lot specifically other than to say -- the denim business, by the way, is not on the wane. It’s still very, very strong, but as other things change, we have never seen any decrease in the other newness that’s coming up that’s going to allow us to continue to do lots of volume. Barbara Wyckoff - Buckingham Research Group: Have you seen any kind of migration from a boot cut kind of a silhouette to a skinnier jean so far?

That’s a great question. We’ve been talking about that as we’re out in the stores, and yes, it’s starting. A lot of it has to do with the way an individual sales person or a crew adopts it, and say here’s what’s coming up, here’s what’s new. Obviously if you’re a fashion-oriented customer and you’re aware of it, you’ve seen what’s happened in magazines or television or just paying attention to fashion, but as it starts trickling down to the rest of customers, yes, it’s starting to happen. It will not be an overnight switch. I think there will be an evolution into those silhouettes changing, and we’re scrambling to make sure that we’re right there when that happens. Barbara Wyckoff - Buckingham Research Group: Thank you.

Thank you. Our next question comes from Stacy Turnof. Stacy Turnof - Merrill Lynch: Good afternoon. Following up on Michelle’s question regarding merchandising changes, without you guys going into too much detail, would you be able to share whether it’s going to be new products are coming in the fall, or is it more so that you’re ordering product differently store by store in that women’s area?

It would probably be more a version of ordering products somewhat differently literally across the brands that we do a lot of business with, and targeting the type of things that we can do best. You know, we’re really buying across different need states for the customer related to fit, price, occasion and style. On the occasion part, that’s a big part of it and it can literally be broken out into casual clothes versus work clothes. As this has evolved over the years, work clothes don’t literally just mean suits. It means a lot of things. So right now, I think it would be premature to talk about all this. I think we’re pretty clear on the balance that we need going forward in the foreseeable future, and that does involve some adjustments to where we’ve been in the past couple of years. Stacy Turnof - Merrill Lynch: But the work apparel will be the focus?

I’m sorry? Stacy Turnof - Merrill Lynch: Wear-to-work apparel?

Well, wear-to-work apparel is part of it, but when I talk about buying for occasion, that’s part of it and so is the casual part of it too. We’ve had some success with the premium denim, and maybe some more of the casual parts of the business, as have others. But in a lot of ways, that also reflects there’s a lot of opportunity there. There’s growth and there is probably more than we’ve been able to maximize. I think they’re both valid areas for us to be able to grow. Stacy Turnof - Merrill Lynch: Right, and then one more question, which is could you comment on how some of your designer shoe area is doing, since that’s been one of the first areas that you started to roll out higher end products?

It’s been pretty darned strong. Customers like shoes. We like selling them, so it’s been really great for us to be able to layer on some new businesses in certain stores. We have had some improved distribution there, and the customers are definitely embracing a lot of that real luxury footwear that we started carrying, so it’s been a solid, solid part of our business. Stacy Turnof - Merrill Lynch: Great, thanks, keep up the good work.

Our next question comes from Dana Cohen. Dana Cohen - Banc of America Securities: Following up on the fashion trend, I’m just curious about your thoughts, just the whole trend to more tighter bottoms looser tops. How do you see that evolving in the fall? As well, do you think it’s a trend that can be accepted by the consumer? I’m not sure it is a universally good-looking trend?

That’s another good question, much to the point of the previous question about the straight leg jeans. I think it remains to be seen. We’ve sold a fair amount of that, but it’s been to a very fashion-oriented customer. It hasn’t necessarily been to the masses. All those things have to be adopted and adapted in a way where it creates volume, so it’s hard to say right now. We’ve lived through these cycles before. If you’re old enough like we are, we’ve seen some of these things come and go, so we know there’s business to be done there. But you’re right. That really speaks to the fit part of the business, and some of that stuff is not going to fit everyone perfectly, so we adjust to make sure that we maintain the balance in all ways. Dana Cohen - Banc of America Securities: So it sounds to me that for now, it’s more on the edge than moving to the mainstream?

I guess it depends on how you define edge, but it’s probably fair to say it has more traction with the real fashionistas probably than more of the mainstream customers at this point. Dana Cohen - Banc of America Securities: Mike, can you just elaborate about your comment about the leverage and the potential opportunity with the Visa portfolio? Just give us a better sense of your thoughts there and what you might do with the cash.

Sure, Dana. I think we’ve been in the past clear about our priorities over capital, and that is obviously we want to reinvest back in the business first and take care of our operating needs. Then we look at the alternatives to return it back to the shareholders, and we’ve done that pretty successfully over the last year or so. As we look at these two financings maturing and we look at the quality of our balance sheet, there obviously is an opportunity here to potentially lever up those receivables a little bit. We’re going to look at what the possible uses of that cash will be over the next year. Obviously that won’t happen until next spring, but we felt it was important to let everybody know that we’re going to go through this transition over the next several quarters, and understanding how we want to use that capital. As we know more, and we’re more clear about it based on the needs as they come in the future, we’ll update you on that. Dana Cohen - Banc of America Securities: But is this sort of replacement debt or is it incremental debt if you’re paying down some [Inaudible]?

Well, the $500 million would be replacement, and then to the extent that we lever above that, that would be additional. Dana Cohen - Banc of America Securities: Great, thanks so much.

Thank you. Our next question comes from Christine Augustine. Christine Augustine - Bear Stearns: Thank you. The first question I wanted to ask you was, you mentioned in your prepared remarks that you had better control, or better than planned fixed costs in the SG&A. Is that the IT spending?

An element, a small part of it was IT. We also continue to have some efficiencies in our distribution area, and we also had some efficiencies in our direct business. The combination of several of those factors helped us improve our fixed costs. Christine Augustine - Bear Stearns: So you’re actually talking about reducing the fixed costs, not the point that you got leverage because the comp was better?

It was a combination of both. Christine Augustine - Bear Stearns: But there was cost reduction?

There was some cost-savings relative to budget, that’s correct. Christine Augustine - Bear Stearns: Are you able at this point to discuss anniversary sale with us? Because last year was sort of the first time you made some changes, and I’m just wondering what the follow-on or what we can look for with the follow-on this year?

Pete, you want to talk about that?

I’ll take that one. The evolution of whatever we’re doing in the sales, like anniversary, is more gradual than it is revolutionary. We always make tweaks to it, particularly since it’s such a huge part of our year. I think the major thing there is making sure that we get as nimble as possible, and we buy as close to season as possible to ensure that we have the most desirable product. But there really, there’s not a lot new to talk about there. I guess the answer your question is we’ll have to wait and see until after actually the sale has unfolded and what’s happening there, but we expect to do well. Christine Augustine - Bear Stearns: My final question, Mike, is does this mean that potential sales of credit card receivables is off the table?

Well, I think we’ve been pretty clear that it’s not part of our plans to sell that asset, that it’s a very important part of our business, and it’s important to us and our customers, and no, there are no plans to sell it. Christine Augustine - Bear Stearns: Thank you very much.

Thank you. Our next question comes from Jennifer Black.

Good afternoon, and let me add my congratulations. I have a couple of questions. First question, I wondered if you could update us on plus sizes as well as petites?

Jennifer, the plus size business is relatively stronger than the petite business right now. Petite business continues to be relatively challenging. The plus size business is pretty strong.

Aren’t you making some changes in petites that we should…

No, not yet. We’re kind of in the process of evaluating all that and finding the best way to go, and as I mentioned earlier, there’s nothing to announce. There’s no kind of revolution in our women’s business, and if something substantive would have happened with petites, obviously that would have been a major thing we would have talked to you about, but there really is nothing to talk about at this point. I think we want to continue to monitor the business and ultimately, we’ve got to be investing in the things that are really working for us and always looking to evolve.

My second question is your new designer section on the Internet, which is fabulous, have you had a great response to that?

It’s been interesting. So far it’s been good. We’ve been right about on plan. We’re learning a lot. We’re still not fully enabled there in terms of the customer being able to literally click and buy and what have you. There is some manual process over the phone and stuff, so I think until we get to a place where that is all up and going, it’s going to be difficult for us to evaluate the effectiveness. But it’s been well-received by customers. They like it. We’ve been making our plans so, so far so good.

Lastly, I know you’ve discussed the opportunity in women’s apparel. I wondered if we would start to see some changes at anniversary sale with what you’re trying to do in women’s apparel?

It’s a little optimistic. I think it’s possible you’ll start to see some of it. We’re obviously trying to make an impact as soon as possible, and fall is a great place to start, and the anniversary is always the very beginning part of fall, so hopefully we’ll have some good things to talk about there.

I would think the feedback you get would really be helpful going forward.

You bet.

All right, thanks so much and good luck.

Thank you. Our next question comes from Richard Jaffe. Richard Jaffe - Stifel Nicolaus & Company, Inc.: Thank you very much. Two questions, one’s a follow up on the shifts or the changes ahead for women’s apparel. Obviously the product is going to change. Will you try and change the physical plant, the stores, the signage, the actual layouts of the departments, either in signage or in flow?

Difficult to predict. I think the fair thing to say is that it will always change. I mean, if you were to go back in time and look at our business over the last 20 years, there’s been a lot of changes. We are prepared to change, if need be that way. There will be subtle things over time, but it would be naïve and probably wrong for us to say there’s no way we’re going to ever change. That would be a dumb thing to do. Richard Jaffe - Stifel Nicolaus & Company, Inc.: How’s it going looking for real estate, either in Manhattan or nationwide? Can you comment on the process?

You know, with all the activity out there, we continued to look at opportunities on an individual basis. I think it’s fair to say and we’ve said it before that there’s more activity out there today than there has been. We’re doing our due diligence, and as things firm up and become clearer, we’ll continue to share with you how we’re doing on that. Richard Jaffe - Stifel Nicolaus & Company, Inc.: Thank you.

We have time for about one more question.

Yes, our next question comes from Neely Tamminga. Neely J. N. Tamminga - Piper Jaffray: Just following up, I guess dovetailing pretty nicely into Richard’s question. Can you just revisit a little bit on the capacity for real estate? How many stores do you think you can bring on? I mean, it looks like you have 7 or 8 openings for 2008, maybe 4 that are out there right now for 2007. Can we get some deals done yet for 2007, or is it getting to be too close to that cut date for next year?

In terms of 2007, that’s a little bit close to our time frame. By the time that we can structure a deal, get everybody signed off on it, and then actually go through the process of building it and staffing it and opening it, ’07 is pretty tight. So more of the new store opportunities that you’ll probably see going forward will be ’08 and beyond, and probably beyond ’08 because ’08 is a pretty full schedule right now. Neely J. N. Tamminga - Piper Jaffray: That’s what it seemed to be. I just wanted to double check on that. Thank you.

Thank you. At this time, I would like to turn the call back over to you. R. J. Jones: Thank you for participating in our conference call this afternoon. If you have additional questions or need further information, please contact me at 206-303-3007. The replay number for this call is 866-463-4967. The number again is 866-463-4967. There is no pass code required. The replay will be available for 48 hours. An archived version of the web cast will be available on the Investor Relations section of our website for 30 days. Thank you for your interest in Nordstrom.

Thank you. This concludes today’s teleconference. All participants please disconnect at this time.