Rob Campbell – Treasurer and Vice President of Investor Relations Blake W. Nordstrom – President and Director Michael G. Koppel – Chief Financial Officer Peter E. Nordstrom – Executive Vice President and President of Merchandising Erik B. Nordstrom – Executive Vice President, President of Stores

Robert Drbul - Barclays Capital Jennifer Black - Jennifer Black & Associates Deborah Weinswig - Citigroup Michelle Clark – Morgan Stanley Lorraine Hutchinson – Bank of America Charles Grom – J.P. Morgan Adrianne Shapira – Goldman Sachs

Welcome to the Nordstrom first quarter 2009 conference call. At the request of Nordstrom, today’s conference call is being recorded. (Operator Instructions) I will now introduce Rob Campbell, Treasurer and Vice President of Investor Relations for Nordstrom.

Good afternoon everyone and thank you for joining us. Today’s earnings call will last approximately 30 minutes, and we will allow time to answer your questions. Before we begin, let me remind everyone that today’s discussion will contain forward-looking statements which are subject to risks and uncertainties that could cause the company’s actual results to differ materially from the expectations and assumptions discussed due to a variety of factors that affect the company, including the risks specified in the company’s most recently filed Form 10-K. Participating in today’s call are Blake Nordstrom, President of Nordstrom, Inc., and Mike Koppel, Executive Vice President and Chief Financial Officer who will discuss the company’s first quarter performance and business outlook. Joining us for the Q&A are Pete Nordstrom, President of Merchandising, and Erik Nordstrom, President of Stores. Blake, Pete, and Erik are traveling today and have called in from different cities. With that, I will turn the call over to Blake. Blake W. Nordstrom: Good afternoon everyone. Mike will review the financials and some of the specifics with all of you in a moment, but I want to take this opportunity on behalf of our team and share with you how we are managing the business and achieving results at this time. This afternoon we reported first quarter net earnings of $0.37 per share. These numbers include a tax benefit of $0.06 per share from the closure of the company’s 2007 federal tax return audit. Separate of this benefit, our performance for the quarter was $0.31 per share, which is down from $0.54 last year. Total sales declined 9.2%, and on a comparable store basis, sales were down 13.2%, in line with our plan, but we’re not satisfied with decreases. Our performance is the result of a concerted effort by our leadership team to focus our planning and resources to improve the business in what continues to be a challenging environment. In the fourth quarter in which we were in a defensive position reacting to changing conditions, we quickly updated our plan to meet the daily realities of our sales results. We are now benefiting from those actions with plans that are in line with sales trends and are able to get in front of the business. We are in a proactive position today, being assertive about our business. While we don’t know what lies ahead, we are well positioned to continue to efficiently manage our business during these times. Our first priority continues to be offering our customers the best possible service and merchandise. We continue to work on what’s taking place at point of sale by enhancing our relationships with the customers and encouraging our salespeople to improve their business with the tools that are available. It’s critical that we manage our inventories in this current sales environment. By keeping inventories in line, we are able to maintain flexibility, ensuring that we have a good flow of merchandise with product that meets and exceeds our customers’ expectations for quality, fashion, and the most sought after brands. It is also essential that we continue managing expenses both on the selling floor and in particular back of the house. Overall, our actions relating to inventory, expenses, and capital expenditures are positioning us well for when the retail sector improves. During the quarter, we opened two new full line stores, relocated one full line stores, and opened four rack stores. Collectively, these stores are exceeding our plan. These openings were a great experience for our company because we were reflective of the type of excitement, energy, and crowd that are consistent with our store openings over the last five years. It was heartening to see these customers respond positively to these new stores, our people, and our merchandise offering. Certainly the results prove customers will respond if given the reason to buy something new. We believe we have a solid plan in place, against which we are executing well despite external conditions. The various metrics we use to monitor the business indicate our team has not only risen to the occasion, but also positioning the company to gain market share over time. Our continued strong financial position coupled with our strategy gives us optimism that we will emerge stronger from these times. With that, I’d like to turn the call over to Mike. Michael G. Koppel: Good afternoon everyone. Over the last several months, we have business trends moderate with our performance more aligned with how we plan our business. By taking a realistic approach to our sales plan, aligning both our expenses and inventory and being disciplined in our execution, we achieved performance in line with our planned sales and better than our planned earnings. But while the retail portion of our business is becoming less volatile, our credit card trends were worse than planned. As a result, earnings for the quarter include an above-plan increase to our bad debt reserve. First quarter earnings per diluted share were $0.37, down 31% last year, which was better than we anticipated. The first quarter included a benefit of approximately $12 million or $0.06 per share related to the closure of our 2007 federal tax return audit. Our earnings before interest and taxes, or EBIT, were $146 million and EBIT as a percentage of total revenues was 8.1%. Total retail sales declined to $1.7 billion or 9.2%, and same store sales declined 13.2%. Top performing merchandise categories were dresses, junior women’s apparel, and cosmetics, while the South and Mid-Atlantic regions were the top performing geographic areas. Gross profit rate decreased 215 basis points for the quarter. Approximately half of the decline in rate was attributable to the impact of fixed buying and occupancy expenses as a percentage of reduced sales. Our markdowns versus first quarter last year were reduced both in dollars and as a percentage, which is another indication of buying discipline and reduced volatility in the business. Quarter end total inventory per square foot was 12% from prior year, which is better than our total company sales trends. Retail selling, general, and administrative expenses decreased $46 million, compared with last year’s first quarter. Since the first quarter of 2008, our retail square footage grew 6% which added $17 million in additional cost from new stores. Adjusting for these new store expenses, total comp store and headquarter costs decreased $63 million. Approximately half of the SG&A reduction from last year came from lower variable expenses, consisting primarily of selling costs with the other half due to reduction in overhead. Retail SG&A rate remains flat to last year, as the reduction in sales was matched by a reduction in expenses. Our expense performance was solid in Q1, and we will remain focused on it throughout the year. Turning now to the credit business, as we stated in the past, the credit business is important to us. It provides a way to connect and build long-term relationships with our customers who on average spend more with us than non-Nordstrom card holders. It’s an extension of our brand that we value. That said, the deterioration in the economy over the last 18 months clearly has had an unfavorable impact on our credit results. For the quarter, credit card revenues increased $16 million from last year, mainly due to the increase in APRs that we implemented in the fourth quarter of 2008 and a 6% increase in outstanding balances. Credit card SG&A increased $42 million year over year reflecting higher bad debt expense. Our delinquency rate increased 147 basis points to 4%, and writeoffs rose 377 basis points to 8.7%. Although the Q1 writeoffs were consistent with our plan, the increase in delinquency rates were worse than planned—a trend indicative of higher future writeoffs. As a result, we increased our bad debt reserve by $23 million over the fourth quarter of 2008. We will continue to pay close attention to these metrics as we go throughout the year. Net interest expense of $31 million was flat to last year due to increased debt levels offset by lower variable rates. In the fourth quarter of 2008, we had $250 million of long-term debt mature, which we funded by issuing commercial paper. At the end of the first quarter, we had $265 million of commercial paper outstanding. We are monitoring the credit markets for an opportune time to refinance these short term borrowings with long-term debt. We ended the quarter with an adjusted debt to EBITDA of 2.7 times. Although this ratio has increased from year end, it is in line with our plan, better than industry average and remains well within the range to maintain our investment grade rating. We ended the quarter with $78 million of cash and $685 million available in short-term borrowing capacity. Overall, our first quarter performance exceeded our expectations. Based on this performance, we are increasing our annual earnings per share guidance from the original range of $1.10 to $1.40 to a revised range of $1.25 to $1.50. This includes the favorable impact of $0.06 per share related to the closure of our 2007 federal tax return audit. The increase in our guidance reflects better than planned results for the first quarter and achieving our plan the remainder of the year. As our customers remain careful about their purchasing decisions, our focus continues to be on building customer relationships and loyalty through a superior service and product offering. With that, I’d like to turn it over to questions.

(Operator Instructions) Our first question is from Robert Drbul - Barclays Capital. Robert Drbul - Barclays Capital: Can you maybe give us an update on where you are with the sharper price point strategy and how that’s unfolding as the year continues on? Peter E. Nordstrom: We’ve worked with this pretty hard as you know from some of the reaction to the business in the fourth quarter, and we’ve been able to impact on a go-forward basis, and right now we’ve been able to change our average regular price point. When you include cosmetics which has remained about the same and roll up all the other merchandise divisions, we’re actually down a little over 10% in our average price. So I do think it’s important that we keep that in context. The last few years, our average price point rose a bit, and that was really in reaction to what our customers wanted to buy from us, and the adjustment we’re seeing currently is with the same customers reflecting their buying mood and what is it that they’re interested in buying us and what they value, so we’re right on top of that. Because our inventories are in good position, we are able to be really responsive to it and, yes, we’re in pretty good shape there. Robert Drbul - Barclays Capital: Mike, given the continued challenges there, have you guys reevaluated or thought about perhaps potentially selling that business or getting out of the credit business overall? Michael G. Koppel: The answer is no. We still believe very strongly in the strategic importance of our credit card. It’s clear we’re going through a difficult cycle, and that end of the business is seeing some tougher innings than some others, but we continue to have customers in our portfolio that spend more than those who have other cards. We continue to build better relationships through the rewards program, and as this cycle turns around and when it does correct itself, we expect that business to be back to where it was, so, no, we’re still very excited about having the business.

Your next question comes from the line of Jennifer Black - Jennifer Black & Associates. Jennifer Black - Jennifer Black & Associates: Can you talk about the real estate and the scaling back of mall developers and how that may impact your business or not impact it, and I know in many cases you don’t pay rent, and I wondered if you could ever foresee a time where you’re actually paid to take a space as an anchor in a mall? Erik B. Nordstrom: As you know, there’s been a fairly significant pullback from mall development activity and our store opening schedule has had some pullback accordingly. To your specific question do we ever see a time we get paid to take space, I don’t know on that. The biggest factor for us in evaluating locations for us is not the amount of money a developer will give us; it’s the volume potential of the location because ultimately the volume, the sales per square foot, drives so many factors in our business, that if you get into a bad spot because of a high developer contributor, it just doesn’t pay off for us in the long run, and with the economy being tough, there are a number of projects that look good to us, and now when we run the numbers on them, the volume potential comes under our hurdle, so we’re not going to reach for locations that are below our hurdle rates just to fill out our schedule. I would anticipate that these locations when the economy recovers would become attractive again and ultimately will be there. Jennifer Black - Jennifer Black & Associates: I wanted to know how you’re re-energizing the men’s business including the Brass Rail. Peter E. Nordstrom: Men’s business is challenging, and interestingly it’s challenging across all the different categories. I think our best chance to reenergize the business has to do with getting our inventories in a position where we can be proactive about it and not just trying to be reactive, and because we took the difficult steps and had the discipline over the last few months, we’re in a pretty decent shape with that. Even though we’ve had a fair amount of erosion there, we’re really looking at business that’s kind of aligning with what we planned. We’re hopeful that the half-yearly event will be a good event for us just because there is a lot of value placed on the seasonal markdowns that we’re going to be able to take and anniversary which as you know is a real telling event for us as we turn the corner into fall. In speaking to our all our men’s merchants, I think they feel good about what we have to offer there, and we’ll just keep battling and being responsive to what customers expect from us.

Your next question comes from the line of Deborah Weinswig – Citigroup. Deborah Weinswig - Citigroup: Mike, can you go into some of the details in terms of how you thought through your credit revenue guidance? Michael G. Koppel: The credit revenue guidance, basically Deborah, that’s a result of the APR increase we had last November. The yield we’re getting on that has been higher than what we originally thought back in February, and then a small part of that is the higher AR balances. Deborah Weinswig - Citigroup: Can you talk about anything that your vendors are doing to offer customers lower initial price points? We’re hearing that from some other retailers. Peter E. Nordstrom: It’s kind of across the board. Where we have the most opportunity to control price points is with our own products, and we’ve done a pretty good job on our own label, sharpening prices and that’s paid off. Our item business has been really pretty good, and we’ve been able to do that. We’ve been happy that our vendor partners have been really collaborative with us in trying to create value, and I’ve been in a few of these meetings, all the way at the designer level, all through the better price point level, with people talking about magic price points and how to get to a place where things can sell at regular price, so I think there’s a lot of give and take on both sides to arrive at a solution that works best for the customers, so I don’t have any real specific thing other than to say it’s pervasive, it’s across the board, in every category. Deborah Weinswig - Citigroup: Any changes to the half-yearly event besides the date change? Peter E. Nordstrom: We’ll probably make sure to take a hard look at our first markdown to make sure that we can sell at the first markdown price. I think just given what else is going on out there with competitive issues, in the past we might have been able to sell something at 25% off, and that may not do it right now given what customers expect, so we’ll be able to respond to the competition. I think we’ll take a good hard look at it, and we’ll make the decisions as we get right close to it and what’s going to be the price that’s going to take to sell it, so we can it down once. Deborah Weinswig - Citigroup: Mike, can you talk about your systems investments? I think you’re doing something to redefine by store inventory and also there is an investment in the direct business that’s going to be finished up in the fall this year? Michael G. Koppel: This fall, we’re completing what’s been a multiyear plan to upgrade all of our systems to support our direct business. At that point, that business will be fully scalable and it’ll be on new contemporary operating systems, and I think that’s going to be a real plus for us to help us run a more efficient and measurably bigger business. The second piece is we’re working toward improving the way we allocate and assort our units through our merchandise planning process, and as a result we are developing some new practices within our chains, and we’re going to using the tools that we already have, but I think using them to the extent that they’ll help us improve on that planning and allocation at a much higher level than what we are getting today.

The next question is from the line of Michelle Clark with Morgan Stanley. Michelle Clark – Morgan Stanley: Looking at your outlook for 2009 credit selling, SG&A, an increase of $35 to $45 million, can you breakout for us the two components which are one bad debt expense and second operational and marketing expense? Michael G. Koppel: The SG&A for retail was flat, and we broke out separately the bad debt. Michelle Clark – Morgan Stanley: The guidance go-forward. Michael G. Koppel: I’m sorry Michelle. I’m not following your question. Michelle Clark – Morgan Stanley: In your press release, there’s guidance for your credit SG&A, $35 to $45 million for the full year, I’m trying to get a sense of embedded in that what is your estimate bad debt expense increase year on year? Michael G. Koppel: That is all related to bad debt. Michelle Clark – Morgan Stanley: The entire increase is such that you’re going to keep the operational and marketing expense related to the credit card flat? Michael G. Koppel: Yes. Michelle Clark – Morgan Stanley: The other question was you had guided to SG&A for the full year of $100 to $175. Any update there? Michael G. Koppel: No, other than the fact that number is a little lower because of the increase in the SG&A for the remainder of the year, but in terms of everything else, we’re frankly on track and a little bit ahead of our plan with our SG&A results.

The next question is from the line of Lorraine Hutchinson from Bank of America. Lorraine Hutchinson – Bank of America: I was hoping that you’d talk a little about traffic trends through the quarter and how they trended in different regions.

Traffic is off. There’s no doubt we have fewer customers coming through the doors. We don’t have traffic counters in even the majority of our stores, we have them in a few, but we can get customer count through our transactions, and they continue to be down, and have been down for quite some time now, so we really don’t have a specific breakup by region, but the one comment I’d make in looking at regionally is California is not conspicuously at the bottom of our regions as it has been for the last couple years. We’re seeing a little more normal trend, more evenly dispersed regional performance month to month. One region may be down at bottom one month, but the next month, it’s another region, where for the last almost two years, it has been our three California regions pretty exclusively at the bottom. Lorraine Hutchinson – Bank of America: You had spoken on prior calls about trying to get your inventory down to a level where you will be able to chase bestselling product. Are you there now, and do you expect to be in that position for the holidays?

I think we’re there to the extent we can predict what’s going on with the business. We plan our go forward inventory plans based on most recent trends, so even though most people talk about the opportunity to improve in fall given what we are going against this fall, we thought our merchandise inventories plan down to the current sales that we’re dealing with, so we’re giving ourselves some cushion there. Last month we actually had sales growth that exceeded inventory growth, and so we’re in a pretty good space right now, and if something were to change dramatically, obviously that’s another story, but last year, we were reacting trying to get our inventory levels down, because we hadn’t planned that way. Now we’re in a position where if things do moderate some, as Mike had alluded to and become somewhat more predictable, we actually have sales plans and inventory plans that are aligned with that, so it doesn’t require further adjustment. We just firmly believe that to keep our inventories fresh, keep the inventory turning, is our best opportunity for success, and it’s really what our guiding discipline has been.

The next question is from the line of Charles Grom with J.P. Morgan. Charles Grom – J.P. Morgan: If I recall Mike on your fourth quarter call, you didn’t anticipate an increase to your bad debt preserves, and you guys took about $41 million here in the first quarter. Looking at your guidance, it doesn’t suggest that you’re going to take anymore reserves over the balance of the year, so I’m just wondering if you could flush it out where you’re getting comfortable on that for us. Michael G. Koppel: The overall bad debt expense was up $41 million. The actual increase in the reserve for the quarter was about 23-24. Back in the fourth quarter, Charles, our point of view was that we thought unemployment was somewhere in the 9 plus range and that the look of that curve was not going to be as long in terms of the expected length of the unemployment, but I think more recent data over the last several months and then increase in our delinquency rates, certainly it changed our thinking. What we’re currently basing our reserves on is an unemployment factor in the 10% to 10.5% range which is a big driver of our writeoffs and an expectation that really is not going to flatten out till sometime in the beginning of next year, so with those two changes in point of view, and information that we were seeing out there, it just felt appropriate and prudent to make those adjustments in this first quarter. How things play out and whether or not we make additional increases in reserves is entirely a function of how the portfolio continues to perform and what happens in the general economy, so we’ll continue to monitor that. Charles Grom – J.P. Morgan: Could you talk to the drag that you’re seeing to your comps as you guys continue to write off receivables? Have you guys been able to quantify that? How much longer does that continue to be a drag? At some point as you start to stop writing off receivables, I imagine you start to get a comp lift, so just wondering where the potential inflection point is there.

I’m not quite sure I follow, but the writeoff of the receivables is not reflected in comp sales. It’s reflected in the SG&A. Charles Grom – J.P. Morgan: No. I know, but at the end of the day the private card receivables are impacting your sales, so I’m just wondering how much it has historically benefited your comp if you have been able to quantify that.

No. I haven’t been able to quantify in that sense, but I will say that relationship, if anything that could potentially impact is that people start to get over extended in their credit, and their openness to spend isn’t as great as it used to be. That could have an impact, but that’s not what we are talking about here. Charles Grom – J.P. Morgan: If you could just maybe talk to the promotional environment where you guys are seeing from seeing from Barneys, Neiman, and Saks and whether that’s above or below what you thought how you were going to see it a couple of months ago.

Well, there’s more activity than there would have been last year at this time, but it isn’t anything like it was in November/December of the fourth quarter that we most recently went through. That being said, we haven’t quite got to the exact rhythm of the markdown timing that you would expect, so it will be interesting to see how it all plays out actually over the next month in terms of what might be happening there with markdowns, but we got a competitive position. We’re not going to be undersold, but we don’t have any new promotions planned or anything, but I think it’s important that we stay on top of what our competition is doing, and we’ll see.

The next question is from the line of Adrianne Shapira with Goldman Sachs. Adrianne Shapira – Goldman Sachs: Mike, just talking about on comp, you had talked about I guess last quarter, 10-15 for year, but you were expecting the first half to be worse by 300 to 400. Obviously Q1 was not worse and not in that range, so maybe update your thoughts as we head into Q2. Michael G. Koppel: I don’t think Adrianne anything has changed materially from where we were at the beginning of the quarter. We still feel the first half of the year is going to be roughly worse than that 10-15% range by 300 to 400 basis points in the back half, roughly better by that range. We were fortunate enough in starting in the month of April, I think the trend was a little bit better than our plan, but I think it’s obviously way too early to call anything else out, and as we said in our guidance that we’re holding to that sales, and we’re holding the rest of our business plan to that inventory levels and expenses, so I don’t think there’s anything new from where we were there months ago. Adrianne Shapira – Goldman Sachs: The followup question is on your new margin expectation of 130 to 200 basis points, it looks as if a lower decrease than we saw in your guidance last quarter where we got 150 to 250, and yet same-store sales unchanged. It would seem as if it’s all related to perhaps merchandise margin improvement? Michael G. Koppel: Yes. It’s primarily related to that. I think as Pete was talking about the condition that our inventories are in and that we have kept them very prudently at the right level relative to the sale trends, and as I said in my comments the markdown dollars were actually below last year for the first quarter, so we were seeing a little benefit of that. We can only get so much leverage out of that based on where sales are, but we certainly think there’s just a little bit more opportunity there than we thought three months ago. Adrianne Shapira – Goldman Sachs: In terms of the inventory, we saw it down 12%. What would you expect for the back half in terms of inventory planning, the same sort of declines or that starts to moderate a bit? Michael G. Koppel: Currently, as Pete suggested, we’re planning our receipts plans consistent with current trends, and until we see some material changes in sales going in another direction, that’s what you should expect to see.

Thank you for joining us today for our first quarter earnings call. As a reminder, a replay of this call will be available on the Investor Relations section of nordstrom.com under webcasts. Thank you for your time and interest in Nordstrom.