Nordstrom has released its latest earnings report which reflected a mixed performance.
Although sales weakened, the retailer beat Wall Street profit estimates. Post the report, its stock rose by about 5 per cent in extended trading, after initially jumping more than 21 per cent.
Adjusted earnings per share were 90 cents as opposed to the estimated 75 cents and the revenue was US $ 3.87 billion versus US $ 3.93 billion estimated.
“We delivered strong bottom-line results, demonstrating our inventory and expense discipline. We exited the quarter in a favourable inventory position and made important strides in productivity,” said Erik Nordstrom, Co-President, Nordstrom.
Nordstrom has worked on inculcating a strong inventory discipline which is attractive to investors and has been a key driver in the second quarter.
The company, which was reeling in the woes of having too much inventory, cleared it with the help of discounts and markdowns. The company said inventory was down 6.5 per cent over the last year, marking the second consecutive quarter of positive spread between inventory and sales.
Sales at full-price department stores fell 6.5 per cent during the second quarter of 2019 as compared to a 5 per cent drop last year. Net sales at its off-price Nordstrom Rack stores fell 1.9 per cent, a steep decline from the 7 per cent rise in the same year-ago period.
On an unadjusted basis, net income fell by almost 13 per cent to US $ 141 million, or 90 cents a share, compared with US $ 162 million or 95 cents a share a year earlier.
Nordstrom also said its digital sales, which represent 30 per cent of the business, grew 7 per cent. In the same quarter last year, its digital sales represented 28 per cent of its total sales.
