The entrance to a Nordstrom store in Miami, Florida. (Photo by Joe Raedle/Getty Images)
Shares of Nordstrom are climbing in after-hours Thursday trading, but unlike its stock spikes in early February, the catalyst for the move has little to do with the president or his daughter: the retailer reported better-than-expected fourth quarter earnings results Thursday afternoon.
Nordstrom reported that it recorded $4.32 billion in fourth quarter revenue, a 3% increase over revenue reported for the year-ago quarter that nonetheless fell just shy of the $4.35 billion Wall Street consensus. Net income for the quarter came in at $201 million, up 11.7% year-over-year and resulting in earnings of $1.15 per share. Excluding the effect of a one-time tax impairment, the retailer recorded $1.37 in fourth quarter earnings per share, a figure that easily beat the $1.15 analyst estimate.
On a comparable-store basis, sales dropped 0.9% for the quarter. In a conference call with analysts and investors Thursday afternoon, Nordstrom co-president Blake Nordstrom said the result was "consistent with recent trends" but "below" the company's own internal planning.
"We have good momentum in place and we'll continue to make changes to make sure we'll best serve the customer," he said.
While the retailer was caught in a firestorm surrounding Ivanka Trump's line of clothes and shoes -- Nordstrom dropped the brand as a result of its poor sales, though highly publicized consumer boycotts prompted President Trump to accuse the company of treating his daughter unfairly, and inspired his supporters to stage a counter-protest of the retailer -- it should be noted that the company closed its 2016 books on January 28, almost a full week before the hoopla and counter-boycotts broke out. It's also worth noting that Nordstrom is operating in an environment that has been difficult for retailers, to put it mildly. On Tuesday, Macy's reported a 13% plunge in profit; last week, the Census Bureau said department store sales fell 3.2% in January compared to January 2016. This decline follows an 8.5% drop in December department store sales, and a 6.2% decrease in November sales.
Company co-president Peter Nordstrom did say -- in response to an analyst question about the Trump episode -- that the effects of the president's angry tweet were "negligible, not really discernible one way or the other."
On a full-year basis, Nordstrom recorded $14.8 billion in 2016 revenue, up from $14.4 billion in 2015. Full-year 2016 net earnings came in at $354 million, a decline from 2015's $600 million that Nordstrom said was "primarily due to asset impairment charges and other non-operational items in 2016 and 2015."
Full-year earnings per share came in at $2.02 per share; excluding a one-time impairment charge, Nordstrom recorded $3.14 in full-year earnings per share, a result that beat its own outlook (which had called for full-year earnings per share between $2.85 and $2.95).
Comparable store sales declined 0.4% on a full-year basis.
Looking ahead to fiscal 2017, Nordstrom is projecting a 3% to 4% increase in net sales, flat comparable store sales and earnings in the range of $2.75 to $3.00 per share. The retailer is also planning to open 15 new Nordstrom Rack stores during 2017 and one new Nordstrom store.
Following the release of the earnings results, shares of Nordstrom -- which closed Thursday trading down 3.1% -- climbed higher in after-hours trading. The stock is currently up 3.05%.