Nordstrom’s 4Q profit rises 1.7 percent
Friday, February 17, 2012
NEW YORK (AP) — Upscale department store operator Nordstrom Inc. said Thursday that its affluent shoppers continued to spend in the fourth quarter and its profit rose 1.7 percent from a year earlier.
The important retail metric of revenue at stores open at least a year climbed 7.1 percent for Nordstrom, which also operates the Nordstrom Rack chain of discount stores.
But investors were disappointed in the company’s cautious earnings outlook for the current year, and Nordstrom shares slid following the after-hours report.
Nordstrom said it earned $236 million, or $1.11 per share, in the quarter that ended Jan. 28. That’s up from $232 million, or $1.04 per share, a year earlier. Its revenue, excluding its credit card business, rose 12.5 percent to $3.17 billion from $2.82 billion.
The results roughly met analysts’ average forecast. Analysts expected $1.10 per share on revenue of $3.17 billion, according to FactSet.
The shares fell almost 3 percent after hours before recovering to an 8-cent drop. They had ended regular trading up $1.18, or 2.3 percent, at $52.18.
Like many luxury stores, Nordstrom has seen its sales rebound since late 2009 as well-heeled shoppers have become more comfortable with spending, despite volatility in the stock market. The company has said that regular-price selling is now back to pre-recession levels.
But Nordstrom also has made it easier to shop by fusing its online and in-store inventory systems so shoppers can find out online what’s in stock at any given store in the chain, and it’s beefing up its online offerings.
In September, it started offering free shipping on all items without any minimum purchase. Previously, customers had to spend at least $200 to qualify for free shipping. The company also now provides free Wi-Fi access in all of its full-line department stores.
“The consistency of the customer experience both in store and online — and things like selection, multichannel capabilities, personalization, speed, convenience and price — all are becoming more important,” company President Blake Nordstrom told investors during a conference call. “Simply stated, we want to be the retailer of choice whenever, however, wherever customers choose to shop by providing a superior customer experience.”
Company officials said customers were taking strong advantage of the free shipping offer.
Overall, among the best-selling categories were handbags, designer goods and cosmetics. Its online sales rose 35 percent for the fourth quarter.
Revenue at the Nordstrom Rack discount chain rose 18 percent, while sales at stores open at least a year rose 2.2 percent for the company’s discount arm.
Nordstrom said it expects revenue at its stores open at least a year to rise 4 percent to 6 percent in the current full fiscal year.
But it disappointed investors with its outlook for earnings of $3.30 to $3.45 per share for the current full year. Analysts were forecasting adjusted earnings of $3.59 per share for the year, according to FactSet.
The department store chain is based in Seattle. It operates 117 full-line stores, 104 Nordstrom Rack stores, four other stores and serves customers online and through its catalog and the private-sale website HauteLook.
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