Partly driven by strong sales of men’s and women’s apparel, Nordstrom Inc. reported a 9.8 percent gain in first quarter sales to $3.16 billion from $2.84 billion in the prior year while net income fell 8.6 percent to $128 million, or 66 cents a share, from $140 million, or 72 cents a share. The earnings were in line with company expectations, but were below analysts’ consensus of 71 cents.

Same-store sales for the company’s full-line stores and its Web site rose 4.2 percent in the quarter, and the company said men’s and women’s apparel were “top-performing merchandise categories.” Total same-store sales showed a 4.4 percent gain.

The retailer said that based on its first-quarter performance, “the company reiterated its annual outlook for earnings per diluted share of $3.65 to $3.80, net sales increase of 7 to 9 percent, and comparable sales increase of 2 to 4 percent.”

A decline in quarterly earnings was expected as the retailer has been aggressively opening stores, expanding into new markets, remodeling existing units and investing in its online business. For the current fiscal year, the company has earmarked $1.2 billion in capital expenditures.

The retailer said it “continued its progress in executing its customer strategy while maintaining disciplined execution around inventory and expenses.” That effort included opening two full-line stores and 10 Nordstrom Rack stores as well as integrating the Trunk Club, which it acquired last year.

The company said in its report that the impact of the “Trunk Club acquisition and ongoing entry into Canada reduced earnings before interest and taxes by $19 million.” The store openings added more than 1.1 million square feet to the company’s total store square footage.

Other highlights of the quarter include:

• An increase in gross margins by 7 basis points to 35.9 percent;
• A sales gain of 20 percent for Nordstrom.com;
• Full-line sales that increased 0.9 percent, with the Northwest and Southeast regions performing the best;
• A 12 percent sales gain for Nordstrom Rack — primarily a reflection of the store openings.

Additionally, the retailer said there was a 51 percent increase in sales at nordstromrack.com/hautelook, “primarily driven by expanded merchandise selection related to the launch of nordstromrack.com.”

On a call with investors and analysts after the earnings release, Blake Nordstrom, co-president of the retailer, fielded questions regarding possible “cannibalization” of full-line stores and Nordstrom Rack as well as the retailer’s online, off-price offerings.

Nordstrom said any sales transfers were minimal, and will iron out over time. “Our focus is on letting the customer shop how she wants to shop,” he said.

Earlier on the call, Nordstrom said the company “is squarely focused on serving customers on their terms and delivering the high level of service they expect from us.” He said the company is “uniquely positioned to serve customers through multiple ways: full-price, off-price, stores and online.” He added that to generate long-term profitability, the retailer is focused on an “approach that links our businesses through service, products and capabilities.”

Regarding the expansion efforts, Nordstrom said the company is “encouraged with our ongoing rollout into Canada, which over time represents a $1 billion sales opportunity.” He said this fall, the retailer is on track to open a flagship in Vancouver, which “we expect to be one of our largest volume stores” he said.

“This effort will also strengthen our capabilities leading to our upcoming flagship stores in Toronto and Manhattan,” Nordstrom added.

The earnings report was released after the market closed. Shares of Nordstrom closed Thursday down 2.3 percent to $74.15, but were up 0.8 percent to $74.72 in after-hours trading.

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