Nordstrom Q3 earnings up 5.8 percent

REPORT_ Nordstrom reported earnings per diluted share of 0.73 dollars for the third quarter ended November 1, 2014, in-line with company expectations. This represented an increase of 5.8 percent, compared with earnings per diluted share of 0.69 dollars for the third quarter ended November 2, 2013.

During the third quarter, the company opened three full-line stores, including its first store in Canada, and 16 Nordstrom Rack stores, and acquired Trunk Club, which contributed to net sales growth of 8.9 percent compared with the same period last year. Comparable sales increased 3.9 percent. The company updated its annual outlook for earnings per diluted share to 3.70 dollars to 3.75 dollars, from its prior outlook of 3.80 dollars to 3.90 dollars. This incorporated the acquisition of Trunk Club, which is expected to reduce earnings per diluted share by approximately 3 percent in fiscal 2014.

Third quarter net earnings were 142 million dollars compared with 137 million dollars during the same period last year. Earnings before interest and taxes were 262 million dollars, or 8.6 percent of net sales, compared with 253 million dollars, or 9.1 percent of net sales, for the same quarter last year. Total company net sales of 3 billion dollars for the third quarter increased 8.9 percent compared with net sales of 2.8 billion dollars during the same period in fiscal 2013. Total company’s comparable sales for the third quarter increased 3.9 percent.

Full-line net sales increased 0.5 percent, compared with the same period in fiscal period 2013, reflecting three store openings since the third quarter of fiscal 2013. Full-line comparable sales were flat relative to last year, which represented an improvement from year-to-date trends. The Southeast, Southwest and Midwest regions were the top-performing geographic areas. Direct net sales increased 22 percent. Nordstrom Rack net sales increased 107 million dollars, or 15 percent, compared with the same period in fiscal 2013, reflecting incremental volume from existing stores and the impact of 31 new stores since the third quarter of fiscal 2013. Nordstrom Rack comparable sales increased 1.7 percent, down from its year-to-date trend.

Nordstromrack.com/HauteLook net sales increased 34 percent, primarily driven by expanded merchandise selection. Gross profit, as a percentage of net sales, of 35.5 percent decreased 33 basis points compared with the same period in fiscal 2013 due to Nordstrom Rack’s accelerated store expansion and increased competitive markdowns. To date in fiscal 2014, the company opened three Nordstrom stores and 27 Nordstrom Rack stores.