Aug 19, 2013
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Nordstrom sales rise less than expected and forecasts cut

Aug 19, 2013

Nordstrom on Thursday reported lower than expected revenue in its second fiscal quarter as comparable sales at its department stores slipped, prompting the luxury department store chain to lower its full-year sales and profit forecast.

The luxury retailer reported that comparable sales in the quarter ending August 3 rose 4.4 percent from the year-ago period, below the 6.8 percent increase analysts were expecting, according to Thomson Reuters I/B/E/S. Overall sales rose 6.4 percent to $3.1 billion.

It was the second quarter in a row that Nordstrom - long favored by investors for its growth and discipline - had reported disappointing sales and lowered its sales forecast.

Shares were down 2.3 percent to $58 in after-hours trading.

Nordstrom's big online push was the biggest factor behind the disappointing same-store sales - sales at its department stores open at least one year fell 0.7 percent, while e-commerce sales mitigated some the damage, rising 37 percent.

Without the benefit of the earlier timing of Nordstrom's anniversary sale, its biggest event of the year, companywide same-store sales would have been up only 1.9 percent.

The company said sales trends "remained softer than expected" even after a slow start to the year.

For the full fiscal year, which began February 3, Nordstrom revised its outlook and now expects same-store sales to rise 2 to 3 percent, compared with an earlier projected rise in the range of 3 to 5 percent.

It now expects full-year earnings per share of $3.60 to $3.70 per share, down from $3.65 to $3.80

Nordstrom said net income for the fiscal second quarter ended August 3 rose to $184 million, or 93 cents a share, from $156 million, or 75 cents per share a year earlier. That was five cents better, helped by lower selling and administrative costs that the company did not identify.

Nordstrom's Rack chain of outlets, which the retailer plans to double in number by 2016, saw overall sales rise 12 percent, and same-store sales increase 2.4 percent.

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