Nordstrom Net Income Jumps 2.8% (JWN)
High-end retailer, Nordstrom Inc. (NYSE: JWN) fiscal first quarter profit climbed up 2.8%, thanks to a growth in revenues; however, margins narrowed for the period.
The Company shares lost 5.3% to $50.70 in afterhours trading.
Company’s earnings have improved since last two years as demand for its designer merchandise rose after a dismal time during the economic slowdown in the U.S.
A very fragile demand for its luxurious brands at the height of economic recession prompted the Company to look into low- priced products.
Accordingly, Nordstrom expanded its off-price footprint by opening ‘Rack clearance’ stores, a business that has continued to perform well even during the better economic times. Nevertheless, the demand for Nordstrom’s luxury products have also picked up in recent quarters.
For the quarter ending April 28, Nordstrom posted a profit of $149 million, or 70 cents a share, up from $145 million, or 65 cents a share, in the same period last year.
Analysts polled by Thomson Reuters expected earnings of 75 cents a share.
Company’s total revenue, which includes credit-card revenue, soared 13% to $2.63 billion, even as gross margin shrunk to 39.7%, down from last year’s 40.4%.
Earlier this month the company also reported that its retail sales leaped 14% to $2.54 billion as same-store sales grew 8.5%. Same store sales are a perfect gauge of firm’s sales performance as it excludes those stores opened less than a year ago.
Meanwhile the Rack division reported a 20% jump in net sales, while same-store sales for this division climbed 6.8%.
While announcing its quarterly earnings, the Company maintained its full-year earnings estimates.
Although the stock hit a five-year high last week, it has since pulled back 7.3% through the close as Wall Street was disappointed over reduced margins.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht. |
