Nordstrom Sales Top Estimates as Online Sales Fuel Growth

Blake Nordstrom
President Blake Nordstrom is using the company’s chain of outlets to attract more price-conscious shoppers, and he’s plowing more money into e-commerce. Photographer: Daniel Acker/Bloomberg

Nordstrom Inc., the largest U.S. luxury department-store chain, posted first-quarter sales that exceeded analysts’ estimates after its e-commerce orders helped boost results.

Revenue rose 9.7 percent to $3.22 billion last quarter, the Seattle-based company said in a statement Thursday. Analysts were predicting $3.17 billion in the period, which ended May 2. Though profit missed estimates last quarter, the company reaffirmed its 2015 forecast.

President Blake Nordstrom is using the company’s chain of outlets to attract more price-conscious shoppers, and he’s plowing more money into e-commerce. Nordstrom operates an online men’s clothing service called Trunk Club and the flash-sale site HauteLook. It also has invested in the Internet retailer Bonobos.

“Relative to other department stores, they did pretty well,” said Matt McGinley, a New York-based analyst at Evercore ISI.

Nordstrom shares rose 0.9 percent to $74.80 at the close in New York. The stock has fallen 5.8 percent this year.

The acquisition of Trunk Club and a push into Canada crimped profit last quarter. Net income fell 8.6 percent to $128 million, or 66 cents a share, from $140 million, or 72 cents a share, a year earlier. The average of estimates compiled by Bloomberg was 71 cents.

Same-Store Growth

Same-store sales, which include established locations and online orders, increased 4.4 percent in the first quarter. That exceeded the 3.6 percent gain estimated by analysts, according to Consensus Metrix.

Sales at full-line Nordstrom stores rose 4.2 percent on that basis last quarter, more than the 1.2 percent expected by analysts. That was driven by a broader selection, the company said. Same-store sales at the Rack slipped 0.2 percent, missing estimates for a 2.9 percent rise, but an increase in locations bolstered the division’s total revenue.

“People understand they’re funding growth, and there’s going to be fits and starts as they roll out those new concepts,” McGinley said.

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