NEW YORK — Nordstrom Inc. announced that it had an 87.8 percent upswing in fourth-quarter earning results, a result of smaller-than-expected sales decline and tough expense and inventory management.
The Seattle-based upscale retailer reported earnings of $50.7 million, or 38 cents a diluted share, for the three months ended Jan. 31, versus earnings of $27 million, or 20 cents, in last year’s quarter. Year-ago earnings included a $1.7 million pretax charge related to the write-down of its 1998 investment in Streamline Inc., which reduced earnings by a penny.
Weak customer demand caused sales to decline 1.5 percent, to $1.6 billion from $1.7 billion in the year-ago period, while same-store sales slipped 3.4 percent.
Successful semiannual sales helped produce a top-line result that was better than expected. Cosmetics was the overall top-performing category, with comps up in the low-single digits. All other merchandise categories turned in negative comps. Women’s apparel, shoes, activewear and juniors were off in the low-single digits, while men’s apparel, shoes and accessories declined at a mid- to high-single-digit pace.
Selling, general and administrative expenses declined $25.4 million from the same period last year, to 28.8 percent of sales from 29.8 percent.
“Overall, I am encouraged by the progress the company has made,” Blake Nordstrom, president, said on an afternoon conference call.
Results were at the high end of what Nordstrom estimated Feb. 14 when it said fourth-quarter earnings would be in the range of 36 to 38 cents a share, up from its previous range of 27 cents to 31 cents a share. It was also a penny ahead of what Wall Street penciled in. The results were reported after the markets closed, but Nordstrom shares established a new 52-week high of $26.15 in intraday trading on the New York Stock Exchange before finishing Thursday up 28 cents, or 1.1, at $25.38.
Looking ahead, although Nordstrom said he is encouraged by further opportunities to improve margins and expenses, he said those improvements can only carry a retailer so far: “Our model is successful with consistent sales. Therefore our focus is to drive top-line growth. As we look ahead to 2002, our primary focus will be driving sales growth, continuing our progress on operational disciplines and completing the implementation of our perpetual inventory system.”
Over the past year, Nordstrom has set about to turn its business around through a four-pronged approach, including improving the customer service for which it has long been known.
Nordstrom, which currently operates 131 stores, opened four full-line stores during the year, eight Nordstrom Rack stores and one U.S. Faconnable boutique for a 6.2 percent increase in square footage. During fiscal year 2002, square footage is expected to increase 8 percent, with the addition of eight full-line stores and four Nordstrom Rack units.
Looking ahead, Nordstrom anticipates diluted earnings per share during the first quarter of 2002 in the range of 17 to 21 cents, versus 18 cents in the prior year, reflecting continued improvement in merchandise margins and SG&A that is tempered by comp weakness. For 2002, the company estimates EPS of $1.10 to $1.15.
For the full year, earnings rose 22.4 percent, to $124.7 million, or 93 cents a share, compared with year-ago earnings of $101.9 million, or 78 cents. Nonrecurring, pretax charges of $56 million, or 26 cents, were included in 2000 yearend results. Sales were $5.63 billion, an increase of 1.9 percent from $5.53 billion, while comps dropped 2.9 percent. The impact of calendar variations was negligible.