Nordstrom Q4 profit falls on higher costs; will open 26 Rack stores in 2015

Seattle -- Nordstrom Inc.’s fourth-quarter net income fell a lower-than-expected 4.9% to $255 million, down from $268 million a year earlier, even as its same-store sales topped expectations. The profit decline came amid higher costs, including those related to tech upgrades and its acquisition of Trunk Club, and increased promotions at Nordstrom Rack.



The retailer is boosting capital expenditures in fiscal 2015 to $1.2 billion from $751 million last year with plans to open 27 off-price Rack stores, expand into Canada and Manhattan, remodel existing stores and opens a third fulfillment center. On its quarterly earnings call with investors, Nordstrom said it sees a “clear path to reach 300 Rack stores by 2020.”



Revenue for the quarter, ended Jan.31, rose 9% to $4.04 billion. Online sales now represent 40% of Nordstrom’s total revenue.



Total same-store sales increased 4.7%, better than expected, with full-line comparable sales up 0.5% and Nordstrom Rack same-store sales up 3.2%.



For the full year, Nordstrom reported total company net sales of $13.1 billion, up 7.8% from fiscal 2013. Total company comparable sales increased 4.0%.



Nordstrom.com net sales increased 23% on top of last year's increase of 30%, driven by expanded merchandise selection and ongoing technology investments to enhance the customer experience.



During fiscal 2014, Nordstrom opened three full-line stores, including its first store in Canada, and 27 Nordstrom Rack stores, launched Nordstromrack.com and acquired online retailer Trunk Club.



Nordstrom operates 292 stores, including 116 namesake stores in the United States and one in Canada; 167 Nordstrom Racks; two Jeffrey boutiques; and one clearance store.