Nordstrom sales offer fresh hope
U.S. earnings bright spot amid decline of department stores
NEW YORK— Nordstrom Inc. is bucking the trend of declining sales in the department-store industry.
The upscale retailer posted a samestore sales gain of 1.7 per cent in the latest quarter, well ahead of the 0.5-per-cent decline predicted by analysts. Nordstrom also posted earnings that topped Wall Street’s projections.
The results offer fresh hope that the beleaguered department-store model isn’t permanently broken. Shrinking sales at Macy’s Inc. and Kohl’s Corp. had renewed concerns that the entire industry is stuck in an intractable slump. Nordstrom’s more upbeat outlook also provides a tailwind as it considers a plan to go private. In June, the Nordstrom family said it was mulling a buyout, which would give the business a chance to continue its turnaround plan out of the glare of public markets.
Total revenue rose to $3.79 billion (U.S.), beating the $3.75 billion estimate. Earnings amounted to 65 cents a share, a penny above projections.
The company credited its wellknown Anniversary Sale and the strong performance of its private brands for helping fuel results. Nordstrom also posted a 20-per-cent gain in sales from its main website.
The company provided a slightly brighter outlook for the full year. It expects sales growth of about 4 per cent, up from a range of 3 per cent to 4 per cent. And Nordstrom forecast earnings of $2.85 to $3 a share, up from at least $2.75 before.
Still, the retail landscape remains challenging, providing incentive to take the company private.
Nordstrom family members have formed a group to evaluate a possible deal, which would involve acquiring 100 per cent of the outstanding shares, Seattle-based Nordstrom said in June. The board also has created a special committee in connection with the idea.