Online sales up, profit down at Nordstrom
Strong growth in its e-commerce divisions couldn't lift profits at Nordstrom Inc., which reported a drop in earnings for the first quarter.
For the period ended May 2, Nordstrom reported a profit of $128 million, or 66 cents a share, down from $140 million, or 72 cents a share, a year earlier.The retailer also reported that Nordstrom.com and Nordstromrack.com had a combined 70% increase in sales in the first quarter.
The company also said that net sales increased 9.8% and same store sales increased 4.4%, compared with the same period last year.
The company said its first quarter results reflectedacquisition, store expansion and technology costs, as well asstore and online growth, including:
• Two full-line store openings: in Ottawa, Ontario, its second store in Canada, and in San Juan, Puerto Rico
• 10 Nordstrom Rack store openings supporting its accelerated store expansion
• The acquisition of Trunk Club in the third quarter 2014 Based on first quarter performance, the company reiterated its annual outlook for earnings per diluted share of $3.65 to $3.80, net sales increase of 7% to 9%, and same store sales increase of 2% to 4%.
The Nordstrom Rewards loyalty program continued to contribute to overall results, the company said, with members shopping three times more frequently and spending four times more on average than non-members. The company said it opened over 285,000 new accounts in the first quarter. With 4.4 million active members, sales from members increased 11%in the first quarter and represented 38 percent of sales.
This year, the company announced plans to open a full-line store in Norwalk, Conn., in 2018 and Nordstrom Rack stores in Virginia, Michigan and Pennsylvania in 2016. During fiscal 2015, the company plans to open a total of five full-line stores, including two in Canada, and 27 Nordstrom Rack stores.In the first quarter of 2015, Nordstrom opened two full-line stores and 10 Nordstrom Rack stores. The company currently operates a total of 303 stores.