NEW YORK — Nordstrom Inc. had one of those blessed quarters when virtually everything went right.
Forget this season’s retail villain of markdown pressure. In the second quarter, Nordstrom saw profits soar 81.3 percent on strong net and same-store sales growth, lower-than-planned expenses and what the firm called its “best operating margins in years.”
For the three months ended Aug. 2, the Seattle-based better department store chain said net income shot up to $65.9 million, or 48 cents a diluted share, eclipsing the Wall Street forecast by 9 cents. Last year, by comparison, the company registered profits of $36.3 million, or 27 cents.
With comparable-store sales up 3.9 percent on the success of Nordstrom’s annual half-year and anniversary sales, net revenues grew 8.4 percent to $1.79 billion from $1.66 billion a year ago. Sales exceeded the firm’s plan “by a sizeable chunk,” Nordstrom said.
“Strong sales momentum, along with inventory and expenses discipline, delivered our best operating margins in years,” said chief financial officer Michael Koppel on a conference call with analysts. “Sales trends were strong throughout the quarter, which provided expense leverage. All of our regions and merchandise categories comped positively.”
Among the bestsellers were cosmetics, accessories, women’s designer apparel and men’s wear, said Koppel. Women’s special sizes and kids’ were relatively weak, but still produced comp increases.
“Half-yearly and anniversary sales make this the second-highest volume quarter of the year,” said president Blake Nordstrom on the call. “We worked hard to improve our execution, and this is the third straight year of improving comps. Our merchants made the right buys and our customers responded.”
Nordstrom’s new inventory and information technology was critical to better sales and margins, as it allowed “the company to be more agile at chasing hot items and cutting back on slow movers,” wrote Wells Fargo Securities analyst Jennifer Black in a research note.
With strong comps and better execution, gross margin bucked the industry trend to expand 30 basis points to 33.6 percent of sales. More impressively, selling, general and administrative costs retreated 190 basis points to 28.1 percent of sales.Overall, for the first half of the fiscal year, profits skyrocketed, improving almost eightfold, or 690.8 percent, to $93 million, or 68 cents a diluted share. That compares with last year’s net income of $11.8 million, or 9 cents.
Sales for the six months increased 8.2 percent to $3.14 billion from $2.9 billion, and same-store sales comped up 1.6 percent.
In guidance, Nordstrom anticipates third-quarter earnings per share of 16 to 20 cents on a low-single-digit increase in comps. For the full year, the firm forecasts EPS of $1.33 to $1.37 on low-single-digit comp gains and a “slight improvement” in gross profit.
Earnings were released after the close of the market, but Nordstrom shares advanced 32 cents, or 1.4 percent, during the day Thursday to close at $24 in New York Stock Exchange trading.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews