Nordstrom Profit Tops Views Despite Revenue Decline
11 Agosto 2016 - 11:18PM
Dow Jones News
By Maria Armental
Nordstrom Inc., struggling to revamp sales at full-price stores,
on Thursday reported its first quarterly revenue decline in seven
years.
Still, results beat expectations, and company executives,
bullish with results thus far, raised profit projections for the
year.
The Seattle retailer, which affirmed its sales projections, now
expects to make $2.60 to $2.75 a share in profit, up from its
previous outlook for $2.50 to $2.70 a share.
Shares, which in June set a nearly six-year low, surged 11% to
$52.91 in after-hours trading.
Department stores, once the main traffic driver at shopping
malls as the catchall destination for various brands, have been
hard hit by shifts in consumer behavior -- and spending -- with
online sales picking up at the expense of traditional
brick-and-mortar stores.
Macy's Inc. on Thursday disclosed plans to close about 15% of
its full-line stores following another quarter of weak sales.
Meanwhile, Kohl's Corp. on Thursday cut its profit targets for the
year, following another quarter of weak sales.
J.C. Penney Co. is scheduled to report second-quarter results on
Friday.
Nordstrom, which like many other retailers has turned to
discounts to help boost sales and clear inventory, has reported
lower profit in the three most recent years. Profit is again
expected to decline this year.
Over all, sales for the quarter ended July 30 edged down 0.2%
from the year earlier, while comparable sales fell 1.2%, narrower
than the 3.1% decline projected by analysts surveyed by
FactSet.
Sales at the company's full-price stores, which account for the
bulk of sales, fell 2%, with comparable sales at those stores
falling 2.8%. Meanwhile, sales at discount stores Nordstrom Rack
and HauteLook rose 11%, with comparable sales improving 5.3%.
Nordstrom defines comparable sales, a key performance metric for
retailers, as sales at stores open for at least a year and online
sales.
The retailer's second-quarter profit narrowed 45% to $117
million, or 67 cents a share. Total revenue, which includes its
share from branded credit cards, fell 1.4% to $3.65 billion.
Nordstrom sold its credit-card business last year.
Analysts surveyed by Thomson Reuters had projected profit of 56
cents a share on $3.68 billion in revenue.
Inventory rose 1.4%, even as the retailer increased promotions
and markdowns. Gross profit margin decreased 101 basis points from
the prior-year period to 34.3%.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
August 11, 2016 17:03 ET (21:03 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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