These included investments in fulfillment and technology, as well as $5 million in costs related to the company’s imminent entry into Canada.
Net income was 95 cents a share just ahead of analysts’ average estimate for 94 cents. Nordstrom now expects earnings for the year of at least $3.80 a share, up from an earlier forecast of at least $3.75.
Quarterly sales rose 6.1% to $3.39 billion. Nordstrom’s comp sales and the retailer’s the website rose 2.7% in the second quarter, missing the 3.1% that Consensus Metrix had estimated. Its full-line department stores saw sales drop 1.2%, compared with projections for growth of 1.2%.Total comparable sales at all brands, including Nordstrom Rack and HauteLook, increased 3.3%.
Top-performing merchandise categories included men’s apparel, while off-price business Nordstrom Rack posted a sales increase of 18%, with comps up 4%.
Nordstrom, which will acquire Trunk Club for $350 million in stock, is looking to reach younger customers shopping in new ways. The retailer expected it would take a few years to develop a product similar to Trunk Club on its own, President Blake Nordstrom said on a conference call.
Nordstrom, which recently announced the acquisition of personalized men’s clothing business Trunk Club for $350 million in stock, raised its full-year outlook, predicting sales up 6.5% to 7.5%, and earnings per share of $3.80 to $3.90.
However, analyst Richard Jaffe of Stifel reiterated his “hold” recommendation for Nordstrom stock, pointing out: “The challenge facing management is to continue to drive this level of success while faced with the increasing expenses related to maintaining and growing the direct business, a Canadian presence for both full-line and Rack stores and the construction of a NYC flagship store.”