Nordstrom Contends for the Upper Crust

High-end department-store operator Nordstrom (NYSE: JWN  ) has put together an impressive run of sales and earnings growth. Last evening's second-quarter results were no exception, and Nordstrom expects to end the year on a high note. This, coupled with a flagging stock price, could be music to the ears of potential investors.

Quarterly sales improved 5.2% as same-store sales jumped an impressive 5.9% on another successful "anniversary" sale, where especially fashion-conscious customers have the opportunity to buy merchandise before the fall selling season gets officially under way. Additionally, "half-yearly clearance events for women's, men's, and kids' merchandise in June delivered on-plan low-single-digit same-store sales," and Nordstrom saw particular strength in designer and men's apparel during the quarter.

On balance, Nordstrom was able to move higher-margin clothes and other products as gross margin improved slightly for the quarter. Higher selling, general, and administrative costs offset some of the sales gains, but share buybacks contributed to an earnings increase of 6%, to $0.71, which beat analyst projections by a penny.

Sales trends and comps are currently running ahead of plan and were likely a key reason management upped its full-year expectations. It's now calling for earnings of $2.91-$2.97, thanks in part to 5%-6% comps, higher gross profit, and lower other expenses for the year. It also plans to complete the sale of its Faconnable designer business next quarter and report a gain of up to a dime once the transaction closes.

Nordstrom's upper-crust focus puts it in direct competition with the likes of privately held Neiman Marcus, Saks (NYSE: SKS  ) , Macy's (NYSE: M  ) Bloomingdales franchise, and soon-to-be-sold Barneys, which is currently owned by Jones Apparel (NYSE: JNY  ) . The space is definitely crowded, but Nordstrom continued to prove it is a leading snob after reporting another solid quarter. The future looks equally bright as there are now only 98 namesake stores throughout the country. Management plans to open three new stores during the third quarter, continuing a trend of slow but steady growth.

For related Foolishness:

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 534200, ~/Articles/ArticleHandler.aspx, 10/27/2016 4:53:23 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:02 PM
JWN $52.50 Down -1.53 -2.83%
Nordstrom CAPS Rating: ****
JNY.DL $0.00 Down +0.00 +0.00%
The Jones Group CAPS Rating: *
SKS.DL2 $0.00 Down +0.00 +0.00%
Saks, Inc. CAPS Rating: *