Nordstrom Inc.'s (JWN) fiscal third-quarter profit slid 6.2% as
the high-end retailer's sales growth was tempered by the absence of
a key sale event that was held earlier in the year, while overhead
expenses jumped.
Results in the latest period were skewed by the timing of
Nordstrom's Anniversary Sale, which last year ran into the third
quarter but in 2013, fell fully in the second quarter. Still, the
growth generated from that promotion also fell short of the
retailer's expectations.
In the latest quarter, overall same-store sales inched up 0.1%,
compared to an 11% jump last year.
A number of mall-based retailers have been stung by weak traffic
and muted sales as consumers remain cautious about spending, a
trend that Nordstrom hasn't escaped as the retailer has conceded
sales in the first half of the year weren't as strong as
expected.
Despite the slowing sales growth of late, Nordstrom has struck a
bullish tone about the growth of the company's discount Rack unit,
as well as a plan to open stores in Canada.
At the Rack unit, which has added 20 stores since last year's
third quarter, net sales climbed 16% to $95 million. Same-store
sales for that business grew 3.7%.
For the quarter ended Nov. 2, Nordstrom reported a profit of
$137 million, or 69 cents a share, down from $146 million, or 71
cents a share, a year earlier.
Total revenue, including credit card revenue, jumped 2.8% to
$2.88 billion.
Analysts surveyed by Thomson Reuters had projected a per-share
profit of 66 cents on $2.87 billion in revenue.
Selling, general and administrative expenses, meanwhile, jumped
5.3%.
Looking ahead, Nordstrom now sees a full-year profit between
$3.65 to $3.70 a share, lifting the lower end of the company's
muted August view by five cents. Same-store sales are now expected
to rise 2.5%, the midpoint of the company's prior view of 2% to 3%
growth.
Shares slid 1.4% to $62.57 in after-hours trading.
Write to John Kell at john.kell@wsj.com
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