ordstrom 3Q Net Up 6.7% On Designer Demand, Rack Sales DOW JONES NEWSWIRES
Nordstrom Inc.'s (JWN) fiscal third-quarter earnings rose 6.7% as the upscale retailer reported continued demand for designer merchandise and sales gains at its Rack division.
Shares fell 3.3% to $48 after hours as per-share earnings matched analyst expectations.
Looking ahead, the company trimmed its full-year earnings outlook, now projecting earnings of $3.05 to $3.10 a share. Nordstrom also predicted same-store sales would be approximately 6% compared with its earlier view of a 4% to 6% increase.
The top performing merchandise categories in the most recent period were designer items, handbags and dresses, the first of which was the only repeat from the second quarter. The South and Midwest were the best performing regions for the fourth straight quarter.
During the downturn, Nordstrom and many others in the upscale market relied on lower-priced retailing to offset weaker demand for top-tier items. Nordstrom broadly expanded its off-price footprint by opening Rack clearance stores, and it has continued to open new Racks at a strong pace. However, in recent quarters customers have returned to buying full-priced merchandise, with the designer merchandise category emerging as one of the company's best performers.
Nordstrom was the first mainstream retailer to enter the online "flash sale" realm by acquisition when in March it purchased HauteLook Inc.
For the quarter ended Oct. 29, Nordstrom posted a profit of $127 million, or 59 cents a share, up from $119 million, or 53 cents a share, a year earlier.
Analysts surveyed by Thomson Reuters predicted a profit of 59 cents a share.
Total revenue, which includes credit-card revenue, increased 14% to $2.48 billion. Earlier this month, Nordstrom said retail sales rose 14% to $2.38 billion as same-store sales improved 7.9%.
Gross margin widened to 37.3% from 36.9% on leveraging buying and occupancy expenses during the quarter. Retail overhead expenses rose 18%.
The Rack division reported a 24% increase in net sales, while same-store sales climbed 6.8%. The rates were stronger than those in the second quarter.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; email@example.com;