Judging by recent results at upscale department store retailer Nordstrom
As an encore to solid second-quarter results, third-quarter total sales jumped 12.4% while same-store sales catapulted 10.7%. Women's apparel struggles appear to have been left in the dust as designer apparel, accessories, and other product categories came in ahead of management's expectations for the quarter. Even the discount Nordstrom Rack posted double-digit same-store comps.
A more successful sales mix is also enhancing profitability, since Nordstrom has to discount less to move merchandise off its shelves, and lower selling, general, and administrative expenses contributed to net income growth of 26.3%. The company even has excess cash for share repurchases, which contributed to a 33.3% jump in diluted earnings.
After a number of years of lackluster sales and growing pains as Nordstrom expanded outside its Northwestern market, in 2003 the company embarked on an aggressive strategy to improve its inventory tracking and information technology savvy. The initiative has paid off in spades -- the stock is up nearly six times from a May 2003 bottom.
Nordstrom is fast gaining a reputation as a consistent grower, and with only 99 namesake stores, it has plenty of room for expansion. As a contrarian, I find it difficult to be interested in a company that is firing on all cylinders when the stock is trading at an all-time high, but further gains could lie ahead, since there is no reason to believe Nordstrom's sales momentum will come to a screeching halt.
For Fools interested in jumping on board the stocks of popular retailers, it's also worth checking out Kohl's
Be it growth or value strategies, results must be positive going forward if these firms have any chance of being dressed for future success. In other words, thriving firms must continue their virtuous cycles, while underachievers must find ways out of their vicious ones.
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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.