Nordstrom Inc.’s operations during the third quarter exceeded expectations, though there was a net loss of $10 million compared with net earnings of $81 million in the year-ago period.

Earnings before interest and taxes was $55 million, compared with the year-ago EBIT of $155 million.

Net sales for the third quarter ended Oct. 29 increased 7.2 percent and comparable sales increased 2.4 percent. This included a favorable comparison resulting from one week of the Anniversary Sale, the retailer’s largest event of the year, shifting into the third quarter. Combined second- and third-quarter comparable sales, which removes the impact of the event shift, increased 0.4 percent compared with the same period last year. Nordstrom executives see the combined second-third quarter sales trend as reflective of what’s currently happening.

Total sales of $3.5 billion for the third quarter increased 7.2 percent compared with net sales of $3.2 billion during the same period in fiscal 2015.

“We’ve made considerable changes in the way we operate to improve the customer experience while increasing our productivity,” said copresident Blake Nordstrom. “We are particularly proud of our team’s efforts to align inventories and improve our operating efficiencies. These outcomes have positively impacted our operating results.”

Third-quarter results included a non-cash goodwill impairment of $197 million related to Trunk Club, which Nordstrom acquired in 2014. According to the company, Trunk Club “continues to deliver outsized top-line growth, [but] current expectations for future growth and profitability are lower than initial estimates. To further improve the customer experience and better position Trunk Club’s business for profitable growth, the company is making a number of operational changes.”

Blake Nordstrom said in a conference call that Trunk Club “has not performed to the expectations we had when we acquired it,” though he added the company remains committed to the strategy.

Copresident Erik Nordstrom added, “While we are taking the write-down as needed, we are actually very encouraged about what we have learned and how to make the model better. The focus is on making the model better for customers. Two areas I would call out, we think we have opportunity in better connecting with our customers on a more consistent basis and we can be more accurate in what we are putting in the trunks and sending out to customers.”

Nordstrom’s U.S. and Canada full-line stores and, net sales when combined with Trunk Club, increased 2.4 percent and comparable sales increased 0.9 percent.

The top-performing merchandise categories were women’s and men’s apparel. Nordstrom said younger departments in women’s apparel continued to outperform, reflecting strength in denim and collaborations with new and emerging limited distribution brands.

At Nordstrom Rack stores and, net sales increased 10.1 percent and comparable sales increased 3.9 percent.

During the quarter, Nordstrom recognized about $10 million in tax benefits related to the resolution of certain federal income tax issues.

Copresident Pete Nordstrom said the company’s top 20 fastest-growing brands grew 20 percent in the third quarter. Also, overall sales growth outpaced inventory growth.

“The inventory levels are as current as we have seen in a long time,” Blake Nordstrom said. He characterized inventories as fluid, and with good open to buy. “The customer is responding.”

According to Pete Nordstrom, “Our beauty business has been strong relative to other categories for a couple of years now, beauty performed above the average of all our product categories. He also cited boots, including fashion-oriented short booties to over-the-knee boots as a good classification, as well as the sneaker business.

“The women’s apparel business has been pretty good for us,” he added. “Where we have the best success is the young customer stuff, including Topshop. “The challenges have been in accessory categories” though designer businesses across shoes and handbags have been strong.

He said the company has been taking “a lot of initiates that maybe speak to a bit of a younger customer.”

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