Nordstrom Results Top Estimates

(RTTNews) - Fashion specialty retailer Nordstrom Inc. (JWN) said Thursday after the markets closed that its first quarter profit fell 3% from last year, reflecting planned investments in technology and infrastructure costs related to the upcoming entry into Canada.

However, the company's quarterly earnings per share came in above analysts' expectations as did its quarterly revenue. The company also reaffirmed its net sales and earnings outlook for the full year.

Additionally, Nordstrom said that it will seek a financial partner for its Nordstrom credit card receivables, which totals about $2 billion. The company has hired Goldman, Sachs & Co. (GS) and Guggenheim Securities, LLC as financial advisors to help it in the process. The company believes such a move will allow it to maintain its customer focus while gaining greater financial flexibility. The company expects any such partnership to have a minimal impact on existing operations and jobs.

Nordstrom shares are currently gaining 9.04% in after hours trading after closing the day's regular trading session at $61.49, down 39 cents. The shares trade in a 52-week range of $54.90 to $64.19.

Nordstrom operates 270 stores, including 117 full-line stores, 150 Nordstrom Racks, two Jeffrey boutiques and one clearance store.

For the first quarter ended May 3, 2014, the Seattle, Washington-based company reported net income of $140 million or $0.72 per share, compared to $145 million or $0.73 per share for the year-ago quarter.

On average, 29 analysts polled by Thomson Reuters expected the company to earn $0.68 per share for the first quarter.

Total revenue for the first quarter rose 6.5% to $2.93 billion from $2.75 billion in the same quarter last year. Twenty-three analysts had a consensus revenue estimate of $2.86 billion for the first quarter.

Net sales for the quarter grew 6.8% year-over-year to $2.84 billion. Total company same-store sales increased 3.9% in the first quarter. Nordstrom same-store sales, which consist of the full-line and Direct businesses, increased 3.3% in the quarter.

Gross profit, as a percentage of net sales, decreased 124 basis points compared with the same period last year, due to increased markdowns in response to heightened promotional environment as well as Nordstrom Rack's accelerated store expansion and growth in the Nordstrom Rewards loyalty program.

Nordstrom said it continues to expect net sales growth of 5.5% to 7.5% and earnings of $3.75 to $3.90 per share for the fiscal year 2014. Analysts currently forecast the company's annual earnings at $3.85 per share.

The company said it plans to open three full-line stores and 17 Nordstrom Rack stores during the remainder of fiscal 2014.