NEW YORK — As Nordstrom Inc. posted a 38.2 percent profit gain for the third quarter on sales that rose 8.4 percent, the high-end department store raised its earnings outlook for the fiscal year.
The Seattle-based retailer said net income for the quarter ended Oct. 29 climbed to $107.5 million, or 39 cents a diluted share, from $77.8 million, or 27 cents, in the same period last year on sales that jumped to $1.67 billion from $1.54 billion. Same-store sales for the quarter showed a 5.9 percent gain, which raced past the company’s own guidance of a 3 to 5 percent increase.
As a result, Nordstrom raised its full-year earnings per share estimate to a range of $1.90 to $1.95 from prior guidance of $1.80 to $1.90. The raised estimate would mean a year-over-year EPS gain of 38 to 41 percent.
On a conference call with investors, Michael G. Koppel, executive vice president and chief financial officer, said third-quarter results “represent continued strength in our business and efficiency in our operations.”
“All geographic regions delivered same-store sales increases with the strongest performances coming from the South and Southwest,” he added. “The strongest merchandise categories were junior women’s apparel, accessories, men’s wear, women’s designer apparel and cosmetics. We are continuing to see favorable regular-price sales trends and customer traffic remains strong.”
During the third quarter, Nordstrom’s gross margin rate rose 34 basis points to 36.5 percent. The retailer said it opened two full-line stores during the quarter. One in San Antonio, Tex., and one in Irvine, Calif. The last full-line Nordstrom to open this year was in Dallas at the NorthPark Center, earlier this month during the fourth quarter.
Also during the quarter, Nordstrom bought back 4.7 million shares of its common stock, totalling $172.4 million. As a result of the repurchase, the weighted average number of shares out was reduced, the retailer said, and a penny per share was added to the bottom line.
Blake W. Nordstrom, president, told investors on the call that in the coming years, the retailer intends to “build on our current success by fine-tuning our merchandising,” maintaining a high operating performance and “pursuing value by creating growth opportunities.
This story first appeared in the November 18, 2005 issue of WWD. Subscribe Today.
“Maintaining positive same-store sales momentum is our top priority,” Nordstrom said. “Our efforts in this area ultimately boil down to understanding what our customers want to buy from us, and providing them with an exceptional shopping experience through better service and compelling fashion merchandise.”