Nordstrom wins with customers, not Street, in Q4

Nordstrom is doing all the right things when it comes to store traffic, e-commerce and customer service, but it wasn’t enough for Wall Street in the fourth quarter.

Nordstrom’s same store sales grew 4.7% in the fourth quarter; online sales grew to now represent 40% of the store’s business. And just this month the company was ranked No. 1 in the United States in terms of customer service, according to the American Customer Satisfaction Index.

But profits at the Seattle chain are down in the fourth quarter amid big investments and increased markdowns at Nordstrom Rack. Nordstrom posted a profit of $255 million, or $1.32 a share, for the quarter ended Jan. 31. That’s down from $268 million in the same quarter a year ago. Analysts expected $1.35 a share. Nordstrom's net income fell to $255 million, or $1.32 per share, in the quarter ended Jan. 31, from $268 million, or $1.37 per share, a year earlier.

The company, which bought Chicago-based Trunk Club in August to gain market share in men's' clothing and to boost its online business, also forecast 2015 profit of $3.65 to $3.80 per share and sales growth of 7 to 9%. Analysts on average were expecting a profit of $3.76 per share on revenue of $13.47 billion, according to Thomson Reuters. Nordstrom also forecast a bigger loss for its Canada business in 2015 as it continues its expansion with store openings in Ottawa in the spring and Vancouver in the fall.

The company operates nearly 300 of its namesake department stores along with Nordstrom Rack, Jeffrey boutiques and associated websites, online retailer HauteLook, and Trunk Club, a link that Nordstrom expects will strengthen its presence in the fast-growing market of online shopping.