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Nordstrom Profits Gain, Outlook Cut

Department store cut expenses to compensate for slower sales.

Nordstrom at City Creek.

Nordstrom Inc.’s profits jumped 17.9 percent in the second quarter with a boost from its Anniversary Sale, but overall revenues were weaker than expected for the quarter and the high-end retailer cut its earnings outlook for the year.

Nordstrom net profits jumped to $184 million, or 93 cents a diluted share, from $156 million, or 75 cents, a year earlier. The Anniversary Sale, which was held in the third quarter last year, added 6 cents to earnings per share.

Revenues for the quarter ended Aug. 3 rose 6.3 percent to $3.2 billion from $3 billion. Comparable sales increased 4.4 percent, with roughly 250 basis points of that gain coming from the Anniversary Sale. Comps at the full line store slipped 0.7 percent and direct sales rose 37 percent, showing the increasing importance of the Web.

 

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“Sales trends throughout the second quarter showed moderate improvement relative to the first two months of the year but remained softer than anticipated,” the firm said in statement. “The impact of this was mitigated by disciplined execution of inventory and expenses, including a reduction in variable expenses associated with company performance.”

Nordstrom cut its earnings per share outlook for the year to a range of $3.60 to $3.70, down from the $3.65 to $3.80 previously forecast. Sales are slated to rise 3 percent to 4 percent, versus the 4 percent to 6 percent expected earlier.