Nordstrom Profit Tops Street, Lifts Outlook; Shares Up 11%

(RTTNews) - Shares of Nordstrom Inc. (JWN) jumped 11 percent in extended hours on Thursday after the department store chain reported a second-quarter profit that trumped Wall Street estimates and lifted its full-year earnings outlook.

Seattle-based Nordstrom's second-quarter profit plunged to $117 million or $0.67 per share from $211 million or $0.1.09 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.56 per share. Analysts' estimates typically exclude special items.

Revenues for the quarter dropped to $3.65 billion from $3.70 billion last year. Analysts had a consensus revenue estimate of $3.68 billion. Comparable sales for the second quarter decreased 1.2 percent.

Second-quarter gross margins dropped 101 basis points to 34.3 percent hurt largely by increased markdowns and higher occupancy costs. Selling, general and administrative expenses, as a percentage of sales, increased 212 basis points to 29.8 percent.

"Over the past several quarters, our team has been actively addressing our inventory, expense and capital, and in the second quarter, made substantial progress by bringing down inventory in-line with sales," said Blake Nordstrom, co-president, Nordstrom, Inc. "Those efforts, along with the strength of our Anniversary Sale and a great response from customers to that event, drove better than expected results for the second quarter."

Looking forward to the full year 2016, Nordstrom now expects earnings of $2.60 to $2.75 per share and sales growth of 2.5 to 4.5 percent. Earlier, the company expected earnings of $2.50 to $2.70 per share. Analysts currently estimate earnings of $2.57 per share on revenue growth of 2.30 percent.

JWN closed Thursday's trading at $47.56, up $3.33 or 7.53%, on the NYSE. The stock further gained $5.31 or 11.16% in the after hours trade.