Seattle—Nordstrom Inc. reported Thursday afternoon that its third quarter profit fell 6% due mostly to a shift of its annual Anniversary Sale event into second quarter. Nonetheless, the high-end retailer managed to beat forecasts.
For the quarter ended Nov. 2, Nordstrom posted earnings of $137 million, or 69 cents a share, from $146 million, or 71 cents a share, from a year earlier. The shift in the Anniversary Sale accounted for about a negative 6 cent impact.
Total revenue rose 2.8% to $2.884 billion while comparable store sales inched up 0.1%.
Bestsellers: Apparel, Shoes
Analysts’ average estimate expected 67 cents a share on revenue of $2.87 billion.
By division, Nordstrom’s comps (including full-line and direct businesses) were down 0.7%, as against 11.2% rise in the year-ago comparable period. Nordstrom Rack comp sales were up 3.7%.
Top performing categories included, women’s apparel, women’s shoes and cosmetics.
Gross profit expanded 1.7% to $1 billion. However, due to increased occupancy costs related to expansion of Rack Stores, Nordstrom’s gross profit margin as a percentage of net sales at the retail segment contracted 41 basis points to 35.9%.
Total selling, general and administrative expenses increased 4.6% to $793 million due to rise in expenses related to shift of the Anniversary Sale event, increased investments for technological enhancements as well as expansion of Rack stores in Canada.
Looking ahead, Nordstrom updated its forecast for its fiscal full year: total sales should rise 3.5% with comp sales up 2.5%. Gross margin is expected to contract 30 to 40 basis points.
‘Expect a Good Holiday Season’
Per share earnings forecast for the year were raised. Nordstrom now expects fiscal 2013 earnings to come in the range of $3.65 to $3.70 a share compared with the earlier guidance of $3.60 to $3.70. The forecast dovetails with analysts’ estimate for $3.68 a share.
Despite the shorter holiday selling period between Thanksgiving and Christmas, Nordstrom expects another positive season.
“We’ve looked at this over the years, and years where we’ve had more days and years where we’ve had less days, and we tend to see that the overall shopping bag is relatively the same,” said Chief Financial Officer Mike Koppel. “So we planned accordingly and we expect a good holiday season.”
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