Tags: Nordstrom | Profit | Online | Outlet

Nordstrom Profit Tops Estimates as Online, Outlet Sales Grow

Thursday, 15 May 2014 07:04 PM

Nordstrom Inc., the largest U.S. luxury department-store chain, posted first-quarter revenue and profit that topped analysts’ estimates, helped by sales at its lower-priced Rack outlets and online. The retailer's shares jumped in after-market trading.

Net income was $140 million, or 72 cents a share, in the quarter ended May 3, down slightly from $145 million, or 73 cents, a year earlier, the Seattle-based company said Thursday in a statement. Analysts had projected 68 cents a share, the average of 28 estimates compiled by Bloomberg.

Nordstrom and other U.S. retailers have worked to keep costs down after severe winter weather and a sluggish holiday season forced them to deepen discounts. The company relied on e- commerce and outlet sales for growth last quarter, helping boost total revenue by 6.6 percent, ahead of projections.

The shares rose as much as 11 percent to $68.50 in late trading after closing at $61.49 in New York.

Revenue rose to $2.93 billion from $2.75 billion a year earlier, compared with the average analyst estimate of $2.87 billion.

The company also affirmed its forecast for fiscal 2014, which ends early next year. Profit will be $3.75 to $3.90 a share, the retailer said. The average of 31 analysts’ estimates compiled by Bloomberg was $3.86.

Catalog Sales

Nordstrom said its e-commerce and catalog net sales jumped 33 percent last quarter after advancing 25 percent a year earlier. Net sales at the retailer’s Rack outlets climbed 20 percent while sales at Nordstrom’s department stores open at least a year slid 1.9 percent.

Selling, general and administrative expenses rose 5.4 percent to $844 million, a slower rate than revenue growth.

Nordstrom, which is incurring more expenses by rolling out stores in Canada starting later this year, also said Thursday it’s seeking a financial partner for its $2 billion credit card portfolio. Goldman Sachs Group Inc. and Guggenheim Securities LLC are advising it on the process, it said.

The chain is belatedly following other major retailers including Macy’s Inc. and Target Corp. in making such a move. Nordstrom will continue to control the business to maintain the quality of its customer service, executives said on a conference call today.

Credit card revenue advanced 2.2 percent to $94 million in the latest quarter.

Nordstrom’s stock has retreated 0.5 percent this year, compared with a 1.2 percent advance for the Standard & Poor’s 500 Index.

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Nordstrom Inc., the largest U.S. luxury department-store chain, posted first-quarter revenue and profit that topped analysts' estimates, helped by sales at its lower-priced Rack outlets and online.
Nordstrom, Profit, Online, Outlet
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2014-04-15
Thursday, 15 May 2014 07:04 PM
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