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NEW YORK — The second quarter was very good for Nordstrom Inc., but not good enough for Wall Street.
On Thursday, the specialty chain’s quarterly profits skyrocketed 62.3 percent while gaining 88.9 percent for the six-month period. However, while the retailer earned 75 cents a diluted share and beat its own guidance at the high end by 1 cent, it still missed Wall Street’s consensus estimate by 2 cents.
Income for the three months ended July 31 came in at $106.9 million, or 75 cents a diluted share, compared with $65.9 million, or 48 cents, last year, while sales rose 9.3 percent to $1.95 billion from $1.78 billion. Same-store sales showed a gain of 6.8 percent.
The company said color, newness and fashion drove strong, regular-price selling across all categories. The retailer’s profit rose 180 basis points because of strong sell-throughs, which in turn resulted in lower markdowns.
“We just completed another good quarter and are on our way to another year of strong performance,” said Blake Nordstrom, president, during a call to Wall Street analysts.
Nordstrom said for four years, the company has focused on improving logistics in connection with inventory levels and merchandise-related operations. But the president was quick to point out that Nordstrom was “careful not to get too comfortable or spend too much time dwelling on the past.”
So far, replenishment and markdown capabilities have yet to be fully optimized. This is next on the company’s agenda, and once completed, is expected to boost efficiencies as well as sales and margin gains, Nordstrom said.
Executives on the call said the bulk of the retailer’s earnings occurs in the back half of the year.
Separately, Nordstrom’s board approved an 18 percent increase in the quarterly dividend to 13 cents a share.
For the third quarter, the company is expecting earnings per share of between 35 cents and 40 cents on a comps increase of between 1 and 3 percent. Full-year expectations is between $2.46 and $2.50 a share on comps gains of between 4 and 6 percent.
For the six-month period, net income jumped 88.9 percent to $175.6 million, or $1.23 a share, from $93 million, or 68 cents, last year, while sales gained 11.8 percent to $3.49 billion from $3.12 billion. Comps for the period rose 9.5 percent.
This story first appeared in the August 20, 2004 issue of WWD. Subscribe Today.
During the quarter, Nordstrom operated 93 full-line stores, 49 Nordstrom Racks, five U.S. Façonnable boutiques, one freestanding shoe store and one clearance store. A full-line store is expected to open in November in Miami.
Shares of Nordstrom closed Thursday at $40.56, down 4 cents, in trading on the New York Stock Exchange.