Nordstrom beats forecast, stock surges
Shares of Nordstrom surged as much as 10 percent in late trading after the Seattle company reported better-than-expected earnings.
Seattle Times business reporter
As other retail stocks slipped Thursday, shares of Nordstrom surged more than 10 percent in late trading after the Seattle company reported better-than-expected earnings.
Nordstrom posted a first-quarter profit of 72 cents a share, beating its previous outlook of 60 to 70 cents.
The company also said it will seek a financial partner for its Nordstrom credit-card business, which has about $2 billion in receivables.
Nordstrom’s stock shot up $6.51, or 10.6 percent, to $68 late Thursday after the earnings report, surpassing the upper end of its 52-week range of $54.90 to $64.19. The stock continued its surge Friday; it was up 7.86, or 12.8 percent, at $69.35 in midday trading in New York.
Nordstrom said its first-quarter profit declined to $140 million from $145 million a year ago, due to planned technology upgrades and its upcoming expansion into Canada. The retailer will open its first Canadian store in September in Calgary.
Nordstrom’s quarterly revenue rose about 7 percent to $2.9 billion, led by growth of its discount Rack chain and online business.
Sales at Rack stores open at least a year increased 6.4 percent, while sales at established full-scale Nordstrom stores declined 1.9 percent.
The company’s better-than-expected earnings report stood in contrast to disappointing results at other retailers Thursday.
Wal-Mart Stores reported lower quarterly earnings and warned that the outlook isn’t much better for the current period. Shares of Kohl’s also fell after the department-store operator announced a drop in first-quarter earnings.
Nordstrom said finding a partner for its credit-card business would give it greater financial flexibility, with no expected change to customers’ experience and only a “minimal impact” on operations and jobs.
The company’s in-house credit portfolio is a rarity in today’s retail industry as most major department-store chains over the past decade have farmed out management of their credit cards to partner banks, which absorb the risk in exchange for sharing the profits.
Amy Martinez: 206-464-2923 or firstname.lastname@example.org. On Twitter: @amyemartinez