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Details on Industry Insight.
On Monday November 15, 2010, 4:05 pm EST
SEATTLE--(BUSINESS WIRE)-- Nordstrom, Inc. (NYSE:JWN - News) today reported net earnings of $119 million, or $0.53 per diluted share, for the third quarter ended October 30, 2010. This represented an increase of 42.6 percent compared with net earnings of $83 million, or $0.38 per diluted share, for the same quarter last year.
Third quarter same-store sales increased 5.8 percent compared with the same period in fiscal 2009. Net sales in the third quarter were $2.09 billion, an increase of 11.7 percent compared with net sales of $1.87 billion during the same period in fiscal 2009.
THIRD QUARTER SUMMARY
Nordstrom achieved its fifth straight quarter of earnings improvement due to continued positive sales trends, combined with disciplined execution.
Multi-channel same-store sales increased 7.3 percent compared with the same period in fiscal 2009. Top-performing multi-channel merchandise categories included Jewelry, Dresses and Shoes. The Midwest and Northwest regions were the top-performing geographic areas for full-line stores relative to the third quarter of 2009. During the third quarter, the company opened one Nordstrom full-line store in Santa Monica, California (Santa Monica Place).
Nordstrom Rack net sales increased $65 million, or 17.9 percent compared with the same period in fiscal 2009. Same-store sales declined 2.2 percent compared with the same period in fiscal 2009. During the third quarter the company opened nine Nordstrom Rack stores and relocated one store.
Gross profit, as a percentage of net sales, increased approximately 100 basis points compared with last year’s third quarter. The improvement was mainly driven by increased merchandise margin, but also resulted from reduced buying and occupancy costs, as a percentage of net sales.
The company ended the quarter with sales per square foot up 6.5 percent and inventory per square foot up 4.5 percent compared with the third quarter of 2009.
Retail selling, general and administrative expenses increased $69 million compared with last year’s third quarter. New stores and higher volume accounted for the majority of this increase, with the remainder coming primarily from increased investments in marketing and technology. The company continues to evolve with customers’ changing needs by investing more to improve the online and multi-channel shopping experience.
The Credit segment continues to improve. Customer payment rates are increasing, resulting in improved delinquency and write-off trends. Delinquencies as a percentage of accounts receivable at the end of the third quarter were 3.5 percent, which was flat compared with the end of the second quarter of 2010 and reduced from 4.9 percent at the end of the third quarter of 2009. As a result, the reserve for bad debt was reduced by $15 million, which was partly offset by finance charge revenue lower than planned.
Earnings before interest and taxes increased to $221 million, or 10.2 percent of total revenues, from $172 million, or 8.7 percent of total revenues in last year’s third quarter.
During the third quarter of 2010, Nordstrom opened the following stores:
Location Store Name Square
Santa Monica, California Santa Monica Place 132,000 August 27
Nordstrom Rack Stores
Arlington, Virginia Pentagon Centre 34,000 August 26
Fairfax, Virginia Fair Lakes Promenade 38,000 August 26
Durham, North Carolina Renaissance Center 31,000 September 2
St. Louis, Missouri Brentwood Square 34,000 September 16
Boca Raton, Florida University Commons 36,000 September 23
Chicago, Illinois Chicago Avenue 39,000 September 30
Tampa, Florida Walter’s Crossing neighborhood 45,000 October 7
Lakewood, California Lakewood Center 33,000 October 14
Burbank, California Burbank Empire Center 35,000 October 21
On October 28th, Nordstrom relocated its Northtown Mall Nordstrom Rack in Spokane, Washington to Spokane Valley Plaza in Spokane Valley, Washington.
Following the third quarter, on November 11th, Nordstrom opened a Nordstrom Rack store at Arrowhead Crossing in Peoria, Arizona.
FISCAL YEAR 2010 OUTLOOK
Based on third quarter performance, Nordstrom is updating its outlook for fiscal 2010 during which Nordstrom expects earnings per diluted share in the range of $2.60 to $2.65.
The company’s expectations for fiscal 2010 are as follows:
Same-store Sales Approximately 6 percent increase
Credit Card Revenues $20 to $25 million increase
Gross Profit (%) 100 to 115 basis point increase
Retail Selling, General and Admin. Expense ($) $260 to $270 million increase
Credit Selling, General and Admin. Expense ($) $65 to $70 million decrease
Total Selling, General and Admin. Expense (%) 75 to 85 basis point decrease
Interest Expense, net $10 to $15 million decrease
Effective Tax Rate 38.6 percent
Earnings per Diluted Share $2.60 to $2.65
Diluted Shares Outstanding 222.8 million
CONFERENCE CALL INFORMATION
The company’s senior management will host a conference call to discuss third quarter results at 4:30 p.m. Eastern Standard Time today. To listen, please dial 517-308-9140 (passcode: NORD). A telephone replay will be available beginning approximately one hour after the conclusion of the call by dialing 203-369-1255 (passcode: 6673) until the close of business on November 22, 2010. Interested parties may also listen to the live call over the Internet by visiting the Investor Relations section of the company’s corporate Web site at http://investor.nordstrom.com. An archived webcast will be available in the webcasts section through February 13, 2011.
Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 204 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 115 full-line stores, 86 Nordstrom Racks, two Jeffrey boutiques and one clearance store. Nordstrom also serves customers through its online presence at www.nordstrom.com and through its catalogs. Nordstrom, Inc.’s common stock is publicly traded on the NYSE under the symbol JWN.