Nordstrom Gains After Surprise Sales Growth Reassures InvestorsBy
Quarterly uptick follows declines at peers Macy’s and Kohl’s
Nordstrom family mulling a plan to take the retailer private
Nordstrom Inc. is bucking the trend of declining sales in the department-store industry.
The upscale retailer posted a same-store sales gain of 1.7 percent in the latest quarter, well ahead of the 0.5 percent decline predicted by analysts. Nordstrom also posted earnings that topped Wall Street’s projections.
The results offer fresh hope that the beleaguered department-store model isn’t permanently broken. Shrinking sales at Macy’s Inc. and Kohl’s Corp. had renewed concerns that the entire industry is stuck in an intractable slump.
Nordstrom’s more upbeat outlook also provides a tailwind as it considers a plan to go private. In June, the Nordstrom family said it was mulling a buyout, which would give the business a chance to continue its turnaround plan out of the glare of public markets.
Shares of Nordstrom rose as much as 6.9 percent to $47.98 in late trading after the results were released. The stock had fallen 6.4 percent this year through Thursday’s close.
Total revenue rose to $3.79 billion, beating the $3.75 billion estimate. Earnings amounted to 65 cents a share, a penny above projections.
The company credited its well-known Anniversary Sale and the strong performance of its private brands for helping fuel results. Nordstrom also posted a 20 percent gain in sales from its main website.
The company provided a slightly brighter outlook for the full year. It expects sales growth of about 4 percent, up from a range of 3 percent to 4 percent. And Nordstrom forecast earnings of $2.85 to $3 a share, up from at least $2.75 before.
Still, the retail landscape remains challenging, providing incentive to take the company private.
Nordstrom family members have formed a group to evaluate a possible deal, which would involve acquiring 100 percent of the outstanding shares, Seattle-based Nordstrom said in June. The board also has created a special committee in connection with the idea.
Macy’s and Kohl’s gave investors less reason for optimism on Thursday. Shares of both retailers declined after they posted same-store sales declines. The measure -- a key industry benchmark -- dropped 2.5 percent at Macy’s and 0.4 percent at Kohl’s.
“We recognize how competitive the landscape is,” Macy’s Chief Executive Officer Jeff Gennette said in an interview. “We’re not going to rest.”