Nordstrom meets earnings expectations on soft first quarter
As department stores Macy’s, Kohl’s and Dillard’s report first quarter declines this week, Nordstrom posted soft sales results and earnings that met expectations. However, the retailer reported a 0.8 percent decline in its comparable-store sales for the first quarter ended April 29, sending its shares down 3.7 percent after the bell.
Nordstrom’s diverse business that includes HauteLook, Trunk Club and recent addition Black Tux differentiates the retailer from other department stores, not to mention the retailer continues to top approval lists. Nordstrom ranked high in customer experience in Temkin Ratings, was named one of the two strongest brands in America by Harris Poll, and was the only apparel retailer to make Fortune’s 100 Best Companies to Work For List this year.
The retailer’s standing with its customers led to an increase in total customer count in the first quarter, but it did not help with store sales. The Nordstrom brand, including U.S. and Canada full-line stores, Nordstrom.com and Trunk Club, decreased 1.7% in net sales and decreased 2.8% in comparable sales.
However, the Nordstrom Rack business, which consists of Rack stores and HauteLook, did increase 8.7% in net sales and 2.3% in comparable sales.
Nordstrom first quarter earnings were in line with expectations at $0.37 per diluted share. Net earnings were $63 million and earnings before interest and taxes (EBIT) was $151 million, compared with net earnings of $46 million and EBIT of $106 million in the prior year.
Retail gross profit as a percentage of sales increased 7 basis points, and SG&A expenses as a percentage of net sales decreased 70 basis points.
Nordstrom reaffirms its outlook expectations for 2017 and expects net sales to increase between 3% and 4%, comparable sales to be flat, and earnings per diluted share to be between $2.75 and $3.00.
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