Nordstrom reported second-quarter earnings and sales on Thursday that topped analysts’ expectations, sending shares of the stock higher after hours.
Same-stores sales — a metric monitored closely by Wall Street — for the department store were also positive, a result not common among retailers of late. Nordstrom said its positive results this period were fueled by more customers ringing up purchases online.
Nordstrom’s stock was last climbing 3 percent higher in after-hours trading on the news. Shares had closed Thursday down 4.3 percent, following mixed reports by retail rivals Kohl’s, Macy’s and Dillard’s.
Here’s what the company reported vs what Wall Street was expecting:
- Earnings per share: 65 cents, compared to an estimate of 64 cents, according to analysts surveyed by Thomson Reuters.
- Revenue: $3.79 billion, compared to a forecast for $3.75 billion, Thomson Reuters said.
- Same-store sales: an increase of 1.7 percent, compared to a forecast drop of 0.4 percent for full-line and Rack stores, according to Thomson Reuters.
Nordstrom’s net income fell to $110 million, or 65 cents per share, from $117 million, or 67 cents per share, one year ago. Net sales rose 3.5 percent, to $3.72 billion.
Nordstrom said its Anniversary Sale this year, which is historically the company’s biggest sales event of the year, “performed better than recent trends.”
Notably, the retailer delivered online sales growth of 20 percent at Nordstrom.com, and 27 percent growth at Nordstromrack.com/HauteLook. Off-price sales at Nordstrom Rack were up 3.1 percent, while sales at full-line stores in the U.S. fell 4.4 percent. That is still better than a year ago, when sales fell 6.5 percent at its American full-line stores.
Looking ahead, Nordstrom updated its full-year outlook to reflect net sales increasing by 3 to 4 percent, a tad softer than a previous forecast for 4 percent growth. Nordstrom still expects comps to be flat, but it has decreased the low end of its range for earnings.
Nordstrom now expects to earn between $2.75 to $3 per share for the fiscal year 2017, compared to previous expectations for earning $2.85 to $3 a share.
Top of many analysts’ minds this quarter are Nordstrom’s latest talks to go private.
In June, the department store chain announced it was exploring such a transaction by the Nordstrom family after forming a special committee. Reuters then reported that the Nordstrom family would be offering “preferential terms” to potential equity partners willing to fund a buyout.
As a private company, Nordstrom is reportedly hoping to focus on initiatives such as investing more in e-commerce, closing underperforming stores and expanding its off-price chain, Nordstrom Rack. Meantime, department stores across the board are struggling to return to same-store sales growth.
Women’s Wear Daily last week reported that time was running out for Nordstrom to court a buyer, based on conversations the publication had with various bankers. Sources told WWD that Nordstrom continues to have conversations with potential partners, but those discussions are being described as “informal” and “just talks.”
In the first quarter of 2017, Nordstrom’s earnings and revenue beat Street estimates, but a same-store sales miss drove the company’s stock down on the news. Nordstrom has said it expects comparable sales for the full year to be flat.
As of Wednesday’s close, shares of Nordstrom have climbed 2 percent over the past 12 months, though the stock is down nearly 8 percent since the start of the year.
Source: FactSet
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