Nordstrom Inc. on Monday reported that third-quarter profits spiked 43.4 percent and updated its outlook for fiscal 2010.
For the three months ended Oct. 30, income was $119 million, or 53 cents a diluted share, from $83 million, or 38 cents, in the same quarter a year ago. EPS beat analysts’ consensus estimates by 1 cent. Sales rose 11.7 percent to $2.09 billion from $1.87 billion. Including credit card revenues, total revenues for the third quarter increased 11.2 percent to $2.18 billion from $1.96 billion.
For the quarter, comparable-store sales gained 5.8 percent. The company said multichannel store sales rose 7.3 percent, with jewelry, dresses and shoes the top merchandise categories. Nordstrom Rack saw a 17.9 percent jump in sales to $65 million, although comps declined 2.2 percent.
Nordstrom said it achieved its fifth straight quarter of same-store sales and earnings growth because of continued positive sales trends and disciplined execution. It updated annual guidance and now expects fiscal 2010 earnings of between $2.60 and $2.65 a diluted share. It also expects comparable-store sales to rise 6 percent. In August, when the retailer posted second-quarter results, it had expected diluted EPS of $2.50 to $2.65.
Blake Nordstrom, president, said on an evening conference call, “We had a very solid third quarter, and our performance is a continuation of our improving trend over roughly the past two years. October marked our 13th consecutive month of total company comp-store gains.”
He noted the Nordstrom customer continues to “respond favorably to our ongoing pursuit of a more seamless shopping experience.”
Nordstrom added the company was “encouraged by how our rigor and focus on inventory management gives us the flexibility to respond to the customer appropriately…. We will continue to maintain and pursue this strategy of improving turns, which allows us to flow in new compelling product for our customers.”
Mike Koppel, executive vice president and chief financial officer, noted “a substantial increase in customer payments relative to outstanding balances. This ratio is back to previous recession levels. This business is back on track as we continue to open high-quality accounts at record levels.”
Third-quarter credit card revenue was essentially flat at $95 million.
Executives didn’t provide an update on information about a possible Manhattan flagship. However, they said the firm will open an 11,000-square-foot store selling full-price merchandise at 350 West Broadway. The company is still working out the merchandising strategy for the store, and that all profits from that store will go to charity. While the name of the concept has not been disclosed, it will not be a Nordstrom-branded store, according to the firm.
Prior to the third-quarter report, Nordstrom shares rose 43 cents, or 1 percent, to $41.83.
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