Nordstrom posts bigger Q3 profit
Seattle-based retailer Nordstrom said Monday its third-quarter profit rose 43 percent as shoppers opened their wallets a bit wider for such items as jewelry, dresses and shoes.
Seattle Times business reporter
Seattle-based retailer Nordstrom said Monday its third-quarter profit rose 43 percent as shoppers opened their wallets a bit wider for jewelry, dresses and shoes.
Nordstrom posted a quarterly profit of $119 million, or 53 cents a share, up from $83 million, or 38 cents, a year ago. Sales increased 11 percent to $2.18 billion.
"Our customers are highly receptive to newness and fashion in spite of the soft economic climate," President Blake Nordstrom said in a conference call with analysts.
The company also suggested it was able to sell more merchandise at full price after working hard to bring inventory levels in line with demand.
Its per-share profit was better than the 51 cents Wall Street expected.
The company reported earnings after regular stock-market trading Monday.
Its stock closed up 43 cents, or 1 percent, to $41.83, near the upper end of its 52-week trading range of between $28.44 and $46.22. However, shares slipped 78 cents to $41.05 in after-hours activity.
Nordstrom said it now expects full-year profit to come in between $2.60 and $2.65 a share, lifting the bottom of its earlier forecast of $2.50 to $2.65. It also projects its fiscal 2010 sales at stores open more than a year to end up about 6 percent.
The company posted an 8.6 percent increase in sales at stores open more than a year through the first three quarters, so an expected gain of 6 percent suggests it sees slower growth in coming months. For the three months ended Oct. 30, those sales rose 5.8 percent.
"While we continue to focus on growing our business, we believe there is still some uncertainty in the current economic environment and we do not anticipate any meaningful change in overall consumer spending over the near term," Chief Financial Officer Michael Koppel told analysts.
Nordstrom's sales at stores open more than a year, also called same-store sales, have grown each month on a year-over-year basis since October 2009. But that came after many months of declines. The company now faces tougher year-over-year comparisons.
During the quarter, Nordstrom opened a new full-line clothing store in Santa Monica, Calif., as well as nine off-price Rack outlets. It recently added a Rack clearance-sale section to its website and plans to open 16 to 18 Rack stores next year, up from 86 now.
Although a bright spot for most of the recession, the Rack has stumbled of late, posting a 2.2 percent decrease in same-store sales for the third quarter.
Blake Nordstrom said he's confident the Rack can turn things around. "These are highly productive stores and deliver sales per square foot that are more than double that of our competitors' average," he said.
He offered few details about the Rack's new online venture, other than to note it's a "limited" first step and does not represent all the merchandise found in a typical Rack outlet.
"It's early, and again, it's a limited view of it," he said.
Analysts also pressed corporate executives for more information about a philanthropic store to open next year in New York City's Soho district.
As previously announced, Nordstrom signed a lease for an 11,000-square-foot store at the base of a new residential building. It said it will donate all proceeds to charity and operate the store under a different name, with details still to be worked out.
"What we're hoping is that first of all, we get a chance to have more exposure in the biggest market in the U.S., in New York, and be able to learn some stuff in anticipation of hopefully having a full-line store there someday," said Pete Nordstrom, president of merchandising.
The company opened a Rack store in Lower Manhattan last spring, but it does not have a New York City flagship.
A Credit Suisse analyst asked how a small, philanthropic store can help the retailer lay the groundwork for something bigger if it doesn't carry the Nordstrom name.
"People already know that we're attached to it," Pete Nordstrom replied. "It's been in all the press. So I don't think it's going to be a huge secret that Nordstrom's attached to this."
Stifel Nicolaus analyst Richard Jaffe provided a moment of levity when he suggested a name for the new store. "Richard's is available if you'd like," he said.
Amy Martinez: 206-464-2923 or firstname.lastname@example.org