Nordstrom Inc. — fueled by strong sales growth — posted second-quarter net earnings that swelled 15.3 percent to $211 million from $183 million in the same period last year.
Total company sales reached $3.6 billion for the quarter ended August 1, which was a 9.2 percent increase compared with net sales of $3.3 billion during the same period in fiscal 2014. Total comparable sales for the second quarter increased 4.9 percent.
Earnings before interest and taxes were $377 million, or 10.5 percent of net sales. The earnings included $51 million (pre-tax and pre-interest expenses) primarily associated with receivables from its credit card transaction. The impact of the Trunk Club acquisition and the ongoing entry into Canada represented a planned incremental reduction to earnings before interest and taxes of $14 million.
Last May, Nordstrom announced its strategic credit card relationship with TD Bank, N.A. including the sale of its existing U.S. Visa and private label consumer credit card portfolio. The company also entered into a program agreement with TD, in which it will be entitled to a substantial portion of net revenue generated by the credit card portfolio. After it closes the deal, the retailer expects to receive approximately $1.8 billion, “net of $325 million in debt reduction and transaction costs,” the company said.
In the second quarter, Nordstrom reclassified its receivables to “held for sale” resulting in the reduction of expense. The credit deal is expected to close by the end of the year.
Regarding sales trends, the retailer said in its report that the “top-performing merchandise categories included cosmetics and women’s apparel. The strength in women’s apparel was led by coats, dresses and younger customer-focused departments.”
The retailer said its Nordstrom Rack experienced a sales gain of 13 percent to $900 million, which represents “26 consecutive quarters of double-digit growth.”
“Nordstrom Rack comparable sales increased 1.7 percent, on top of last year’s increase of 4 percent, consistent with its two-year stacked trend,” the company added.