NEW YORK (AP) -- Nordstrom Inc. reports its fourth-quarter earnings results after the regular markets close Thursday. The results should give investors insight into how strong the luxury market remains.
WHAT TO WATCH FOR: Luxury spending remained robust this holiday season, and investors will want to know whether a still volatile stock market and worries about the debt crisis in Europe will threaten that momentum.
Investors will also want to know whether Nordstrom's free shipping program for most items for online shoppers hurt profit margins for the fourth quarter. In particular, analysts will be interested in finding out whether the new free shipping program changed shoppers' online buying habits. For example, did it encourage more shoppers to make small purchases online since they knew they wouldn't have to pay for shipping?
Nordstrom's revenue at stores open at least a year climbed 5 percent in January, helped by strong sales of handbags and cosmetics. The results narrowly missed the 5.3 percent rise predicted by analysts. For the company's fiscal fourth quarter, Nordstrom saw an increase of 7.1 percent in revenue at stores opened at least a year.
The figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
WHY IT MATTERS: Nordstrom, based in Seattle, is considered a barometer of luxury spending. Investors and others are watching whether that momentum will be sustained. That would be a good sign for the economic recovery since affluent shoppers have helped to prop up overall spending.
WHAT'S EXPECTED: Nordstrom is expected to earn $1.10 per share on revenue of $3.25 billion for the fourth quarter.
LAST YEAR'S QUARTER: Nordstrom earned $1.04 per share on revenue of $2.92 billion.
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