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Nordstrom misses on earnings, but sales top Street

Nordstrom’s efforts to bridge the gap between brick-and-mortar retail and e-commerce contributed to a significant sales milestone for the fiscal year.

The department store retailer earned $151 million for the quarter ended Feb.3, which included a $42 million charge related to corporate tax reform, down from $201 million for the year-ago period, The company also paid a one-time, non-cash charge of $51 million related to the revaluation of its deferred tax assets, which was partially offset by cash tax savings from a lower federal tax rate. Nordstrom reported adjusted earnings per share of $1.20, below the $1.24 expected by analysts.

Total company net sales increased 8.4% to a better-than-expected $4.6 billion for the quarter, including approximately $220 million from the 53rd week, compared to $4.2 billion in the year-ago period. Analysts had expected revenue of $4.62 billion.

Same-store sales increased 2.6%. By division, same-store sales for the Nordstrom brand, which includes U.S. and Canada full-line stores, and Trunk Club, increased 2.4%. Across U.S. full-line stores and, the top-performing merchandise categories were kids' and men's apparel. In the Nordstrom Rack brand, same-store sales increased 3.7%.

Nordstrom, which bought back 4.6 million shares of its common stock for $206 million during the year, said it would not repurchase any shares while members of the Nordstrom family explore the possibility of taking the company private.

For the year, the company’s net earnings were $437 million, compared to $354 million last year. Net sales increased 4.4% to a “record” $15.1 billion.

Total company comparable sales for the fiscal year increased 0.8%. This slightly exceeded the company's prior outlook for sales growth of approximately 4.2% and comparable sales increase of approximately 0.5%.

The company also continued to experience positive customer trends, including customer growth which increased 4% to 33 million. Nordstrom Rewards customers increased by 35% to 10.5 million.

Sales from Nordstrom Rewards customers represented 51% of sales, an increase from 44% in 2016. Meanwhile, Nordstrom Rack off-price business gained 6 million new customers with approximately one-third of off-price customers expected to cross-shop the full-price business over time.

In addition to generational investments across, Canada and Trunk Club, Nordstrom’s full-price business continued to deliver outsized sales growth, the company said.

Looking ahead to 2018, the company expect net sales to hit $15.2 to $15.4 billion, and same-store sales to rise between 0.5% and to 1.5%.

Earnings per diluted share will range between $3.30 to $3.55.

Nordstrom also plans to open one new full-line store, 12 new Nordstrom Rack stores and one Nordstrom Rack store relocation.
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