Nordstrom earnings review, topline weakness
Following a tough day on Wall Street with the major averages down triple digits, a number of powerful companies reported their second quarter results. Through the storm Nordstrom (NYSE:JWN) reported a mixed second quarter result. All eyes have been on the retail sector this week as economists attempt to judge the true strength of the economy through the business perspective. Up to this point however, the bulk of retail earnings have been overwhelmingly negative with poor performance across the board.
Following the report shares of Nordstrom traded lower by 3% to $57.50 as the company reported lower than anticipated revenues. Poor comparable sales data, far below analyst estimates, worried some growth investors whom have favorited the name for above peer growth over the last few years. The company reported its comparable sales in the second quarter rose 4.4% on a year over year basis, below the 6.8% increase analysts were expecting. On an overall revenues comparison, sales rose 6.4% to $3.1 billion.
Net income for the fiscal second quarter rose to $184 million, or $0.93, from $156 million, or $0.75 per share a year earlier. These results were $0.05 better than anticipated as a result of lower selling and administrative costs that the company did not identify. Analysts will be looking at the comparable data for stores open at least a year, a key metric because it strips out the impact of newly opened and closed locations.
Sales at its department stores open at least one year fell 0.7%, while e-commerce sales helped ease the pain. Nordstrom was able to propel its online sales higher by 37% as the awareness for business grew significantly. Going forward, the company plans to focus its attention on the Nordstrom Rack brand to sustain growth. Its Nordstrom Rack business generated a 2.4% as comparable sales increase alongside overall growth of 12%. The slew of retail earnings continue next week, hopefully strong results will keep the fragile equity market together.
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