Nordstrom profit slips on ‘challenging’ holidays
SEATTLE » Nordstrom Inc. said yesterday its profit fell more than 8 percent in the fourth quarter as even its high-income core customers pared back on holiday shopping.
The Seattle-based luxury retailer beat Wall Street estimates but warned that it expects 2008 to be another challenging year as it strives to overcome lackluster sales of women's apparel amid weak consumer spending.
For the quarter ended Feb. 2, Nordstrom earned $212 million, or 92 cents per share, down from $232 million, or 89 cents a share, in the year-ago period. Analysts surveyed by Thomson Financial were expecting 88 cents a share, on average.
Quarterly sales slipped 4.4 percent to $2.51 billion, in line with Wall Street estimates and down from $2.63 billion last year.
Excluding one extra week in the fourth quarter of 2006, Nordstrom said sales were essentially flat.
Sales at stores open at least a year, a key measure of a retailer's health, declined 0.7 percent.
Nordstrom said it expects first-quarter earnings of 49 cents to 54 cents per share, below the 59 cents analysts had been expecting. The company said it expects same-store sales in 2008 to range from flat to a 2 percent decrease, and full-year earnings to range from $2.75 to $2.90 per share, compared with the $2.98 Wall Street was expecting.
Nordstrom plans to open eight new full-line department stores in 2008, including its first in Hawaii next month, and said it has been picky about locating them in regions where it expects solid growth.
"Although the near-term market may be slower and uncertain, we continue to see high-return investment opportunities and are confident about our core customers' long-term prospects, and the growth potential of our business with them," Mike Koppel, Nordstrom's chief financial officer, said in a conference call with financial analysts.
Designer products across all categories, accessories and women's shoes posted better-than-average sales in the latest quarter, Nordstrom said.
The company is sharpening its focus on offering "a constant flow of new merchandise," particularly in women's apparel, which has fallen short of expectations, Koppel said.