[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / August 17, 2016 / Active Wall St. announces its post-earnings coverage on Nordstrom Inc. (NYSE: JWN). The company announced its second quarter fiscal 2016 results on August 11, 2016. The largest U.S. luxury department-store chain posted second quarter profit that topped analysts' estimates, helped by higher sales at its off-price Rack chain and its Anniversary promotional event and nudged up its earnings outlook for the year. Register with us now for your free membership at: http://www.activewallst.com/register/.
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Earnings Reviewed
For the three months ended on July 30, 2016, Nordstrom reported net income of $117 million, or $0.67 per share, lower by over 44% as compared to net income of $211 million, or $1.11 per share, in the year ago period as the retailer ramped up investment in technology and ecommerce. However, the decline was not as steep as the market was expecting. Analysts had projected net income to plunge to $100.5 million, or $0.56 per share. Total revenue slipped 1.4% to $3.65 billion, slightly missing the $3.68 billion projected
"Over the past several quarters, our team has been actively addressing our inventory, expense and capital, and in the second quarter, made substantial progress by bringing down inventory in-line with sales," said Blake Nordstrom, the company's co-president.
During Q2 FY16, Nordstrom's net sales edged down 0.2%, while comparable same store sales dropped 1.2% compared to the projected decline of 2.6%. The Anniversary Sale began a week later in July, thus extending into the third quarter. This unfavorable shift weighed upon Nordstrom's comparable store sales (comps) by nearly 250 basis points (bps), which in turn hampered net sales.
Segment Analysis
For Q2 FY16, Nordstrom brand's net sales, which include U.S. and Canada full-line stores, Nordstrom.com and Trunk Club, dropped 0.4%, with comps falling 2.3%. The top-performing region was Midwest, while the best-performing merchandise categories were Beauty and Shoes. Nordstrom Rack brand net sales, that comprise Nordstrom Rack stores and nordstromrack.com/HauteLook, advanced 11.2%, while comps grew 5.3%, driven by growth in the Eastern region.
Nordstrom's quarterly numbers followed similarly positive results from Macy's Inc. and Kohl's Corp., both of which earned profits that beat analysts' estimates on August 11, 2016. Macy's announced its decision to close about 100 full-line stores, representing 14% of its total locations. In April 2016, Nordstrom announced plans to eliminate about 350 to 400 positions, primarily in its corporate centre and regional support team.
Given the company's focus on the expansion of its Nordstrom Rewards loyalty program, Nordstrom gained roughly 6 million active Rewards customers in Q2 FY16, marking a 30% improvement sequentially.
Share Repurchase
During the six months ended July 30, 2016, Nordstrom repurchased nearly 1.3 million shares valued at $60 million. Currently, the company has about $751 million remaining under its share repurchase authorization.
Guidance
Nordstrom now envisions fiscal 2016 earnings in the range of $2.60 to $2.75 per share from the prior range of earnings of $2.50 to $2.70 per share. Analysts were expecting earnings of $2.55 per share.
Stock Performance
Nordstrom's shares finished the trading session on August 16, 2016, at $52.66, slightly down by 0.57%, with a total of 4.35 million shares changing hands. The company's stock price has advanced 28.10% in the past one month and 41.24% in the last three months.
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SOURCE: Active Wall Street
