Nordstrom Inc. expects to weather a sagging U.S. economy by enticing customers with fresh products and new store openings, the luxury retailer's chief financial officer said Wednesday.
CFO Michael Koppel, whose comments were webcast from a Piper Jaffray consumer conference in New York, acknowledged that many Americans are facing tough times, given record high gas prices, a soft labor market and tighter credit.
"Obviously, I don't have to tell many of you what's going on in the current environment," Koppel said. "It's pretty tough out there."
Still, Koppel remained confident that Nordstrom will gain market share with an improved product line and opening new stores. Specifically, the company will open eight stores this year and five next year.
"New stores are our best investment," said Koppel, adding that they generate long-term growth and excitement among shoppers in the community.
Also, Nordstrom has been revamping current locations. Koppel said the company has spent over $120 million per year to remodel stores.
Another factor that will help Nordstrom, Koppel said, is that the company's core demographic, typically between the ages of 25 and 54 and making over $100,000 in income, is growing faster than the broader market.
Also, demand for Nordstrom's core consumable items, like cosmetics, has remained healthy, Koppel said. Consumers may be less likely to skimp on purchasing items like these, since they're viewed as somewhat less discretionary.
In the first quarter, Nordstrom's profit came in better than expected, but earnings still declined 24 percent as high gas prices and tighter credit had consumers holding the line on spending.
Same-store sales, which measures sales at stores open for at least a year, dropped 6.5 percent for the quarter, below the 3 to 5 percent decline expected by analysts.
Currently, Seattle-based Nordstrom has 159 stores in 28 states.
Nordstrom's stock declined 64 cents to $33.17 in afternoon trading.
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