November 14, 2013

Nordstrom profit marginally fell in Q3

Luxury store chain Nordstrom reported drop in profit for the third quarter, largely due to a shift in timing of its anniversary sale and higher costs.

By admin-demo

The chain’s total revenues for the third quarter grew 2.9% to $2.88bn, as against $2.81bn in the same period a year ago.

Total company same-store sales for the third quarter increased 0.1%. Slower same-store sale growth was negatively impacted by the shift in timing of Nordstrom’s Anniversary Sale.

The Anniversary Sale, which historically is the company’s largest sale event of the year, took place fully in the second quarter this year, while last year it ran across both second and third quarter.

The chain’s third-quarter profit dropped to $137m, from $146m last year.

Gross margins decreased 41 basis points due mainly to higher occupancy costs related to accelerated Rack store expansion, while selling, general and administrative expenses, as a percentage of sales, increased 65 basis points.

Year-to-date, the company same-store sales increased 2.5% and total company net sales of $8.6bn increased 4.7% compared with the same period last year.

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Nordstrom’s full-line same-store sales decreased 4.2% compared with last year’s same-store sales increase of 8.1%.

Direct net sales increased 23% in the third quarter, on top of last year’s increase of 38%, driven by expanded merchandise selection and ongoing technology investments to enhance the online experience.

Nordstrom Rack net sales increased $95m, or 16%, compared with the same period in fiscal 2012, reflecting 20 store openings since the third quarter of fiscal 2012.

HauteLook net sales increased by 22% in the third quarter.

During the remainder of fiscal 2013, Nordstrom announced plans to open four new Rack stores and relocate one Rack store.

Nordstrom operates 261 stores in 35 states, including 117 full-line stores, 141 Nordstrom Racks, two Jeffrey boutiques and one clearance store. Nordstrom also serves customers through Nordstrom.com and through its catalogs.