Nordstrom on Thursday reported earnings in addition to sales for the second quarter that will topped analysts’ expectations in addition to also raised its outlook for the full year, citing momentum in its online business in addition to robust traffic at Nordstrom Rack.
Its shares soared more than 13 percent in after-hours trading on the news.
Nordstrom’s earnings followed mixed results through rivals Macy’s in addition to J.C. Penney, which both saw their stocks tumble earlier inside week on investors’ concerns about margin pressure in addition to excess inventory building up. however inside case of Nordstrom, the retailer has managed to mitigate some of these pressures by keeping a slimmer real estate footprint in addition to testing fresh concepts, like stores that will don’t sell any merchandise.
Nordstrom said its strong performance during the quarter “was driven primarily by higher sales volume, a lower effective tax rate in addition to the impact of the fresh revenue recognition standard” as This kind of related to the timing of the department store chain’s annual anniversary sales event.
Net income for the quarter ended August 4 was $162 million, or 95 cents a share, compared with $110 million, or 65 cents a share, a year ago. that will was ahead of the 84 cents per share that will analysts were expecting, according to a poll by Thomson Reuters.
Revenue climbed 7.1 percent to $4.07 billion through a year ago, ahead of an expected $3.96 billion in sales.
Sales at those stores open for at least 12 months were up 4 percent overall, far surpassing the increase of 0.8 percent that will analysts had forecast. that will consisted of same-store sales growth of 4.1 percent at Nordstrom’s full-cost locations, in addition to an increase of 4 percent at Nordstrom Rack.
Looking to the full year, Nordstrom today expects to earn between $3.50 in addition to $3.65 per share, up through a prior targeted range of between $3.35 in addition to $3.55 a share. The company said same-store sales could rise as much as 2 percent in fiscal 2018, compared which has a prior targeted range of between 0.5 in addition to 1.5 percent growth. Revenue will be forecast to be as much as $15.5 billion, compared which has a previous target of as much as $15.4 billion.
The department store chain earlier This kind of year called off its plans to take the company private after a cost couldn’t be agreed upon. This kind of wanted to move out of the public market in order to avoid the challenge that will department store owners face today: producing the investments needed to compete against the likes of Amazon in addition to Walmart, while continuing to keep shareholders happy. in addition to This kind of will be no easy task, as more shopping heads online in addition to mall traffic dwindles.
Nordstrom has been testing fresh concepts to keep its stores in addition to assortment of inventory fresh. This kind of has partnered with e-commerce brands like Allbirds in addition to Casper for pop-up shops within Nordstrom stores. This kind of’s also planning to grow a concept known as Nordstrom Local, which will be centered around experiences like manicures in addition to pedicures, on-site tailoring, in addition to helping speed online orders.
Meanwhile, Nordstrom’s online business continues to boom. The company reported e-commerce sales growth of 23 percent during the second quarter, compared with growth of 20 percent a year ago. Nordstrom said digital sales today represent 34 percent of total sales, compared with 29 percent the same time last year.
With stronger consumer confidence in addition to a record low unemployment rate inside U.S., shoppers are opening up their wallets more in addition to are likely to do so This kind of holiday season. that will should bode well for companies like Nordstrom, in addition to Walmart has been another beneficiary of This kind of trend, also reporting strong second-quarter earnings in addition to raising its full-year outlook Thursday morning.
“I think … given the fact that will our inventories [are] in relatively not bad shape in addition to we’re in a position where we can react, I think we feel like we’re in a not bad position for the fourth quarter,” Nordstrom co-president Pete Nordstrom said on a call with analysts investors Thursday afternoon.
Nordstrom shares have climbed roughly 17 percent over the past 12 months, bringing the company’s market cap to about $8.7 billion.