Nordstrom Results Meet Estimates

(RTTNews) - Fashion specialty retailer Nordstrom Inc. (JWN) said Thursday after the markets closed that its second quarter profit fell 0.5% from last year, as technology investments and other costs more than offset a 6% increase in revenue.

The company's quarterly earnings per share came in line with analysts' expectations as did its quarterly revenue. At the same time, the company raised the low end of its full year sales and earnings forecast ranges.

Nordstrom shares are currently losing 3.19% in after hours trading after closing the day's regular trading session at $68.69, up 57 cents. The shares trade in a 52-week range of $54.90 to $70.71.

Nordstrom operates 271 stores, including 117 full-line stores, 151 Nordstrom Racks, two Jeffrey boutiques and one clearance store.

For the second quarter ended August 2, 2014, the Seattle, Washington-based company reported net income of $183 million or $0.95 per share, compared to $184 million or $0.93 per share for the year-ago quarter.

On average, 29 analysts polled by Thomson Reuters expected the company to earn $0.95 per share for the second quarter.

Net sales for the second quarter rose 6.2% to $3.30 billion from $3.10 billion in the same quarter last year. Total company same-store sales for the second quarter increased 3.3%. Nordstrom same-store sales, which consist of the full-line and Direct businesses, increased 2.7% in the quarter.

Gross profit, as a percentage of net sales, decreased 7 basis points compared with the same period last year, mainly due to planned occupancy costs associated with Nordstrom Rack's accelerated store expansion.

Total revenue for the second quarter increased 5.9% to $3.39 billion from $3.20 billion a year earlier. Twenty-three analysts had a consensus revenue estimate of $3.39 billion for the second quarter.

During the quarter, the company repurchased 1.7 million shares of its common stock for $119 million. A total of $359 million remains under existing share repurchase board authorization.

Late last month, Nordstrom said it has agreed to buy Trunk Club, a personalized clothing service for men. The company will acquire Trunk Club for $350 million in stock, a portion of which is retention-based and subject to future vesting. In addition, the deal includes a long-term management incentive plan of up to $100 million subject to Trunk Club's performance. The deal is expected to close in the third quarter of 2014.

For the fiscal year 2014, the company now forecasts net sales growth of 6.5% to 7.5% and earnings of $3.80 to $3.90 per share. Previously, the company forecast net sales growth of $5.5% to 7.5% and earnings of $3.75 to $3.90 per share. The latest earnings outlook does not include the acquisition of Trunk Club, which is estimated to reduce earnings per share by 3% to 5%. Analysts currently expect the company to earn $3.90 per share for the fiscal year 2014.