Wall Street Journal
By Joan E. Solsman
Nordstrom Inc. reported a 25% increase in fiscal-first-quarter earnings on higher sales, while lowering its full-year outlook due to acquisition-related charges.
The company was the first mainstream retailer to make an acquisition to enter the online "flash sale" realm when it agreed in February to buy HauteLook Inc. for as much as $270 million in stock.
Flash-sale sites like HauteLook represent a small but growing segment of the luxury market that offers fashion items in limited-time sales to members, often at a discount.
Nordstrom on Thursday cut its full-year earnings outlook by 15 cents to $2.80 a share.
For the quarter ended April 30, the Seattle-based upscale retailer posted a profit of $145 million, or 65 cents a share, up from $116 million, or 52 cents a share, a year earlier. The latest results included four cents a share in charges from the HauteLook acquisition.
Total revenue, which includes credit-card revenue, increased 11% to $2.32 billion. Earlier this month, Nordstrom said retail sales at stores open at least a year rose 6.5% during the quarter.
Gross margin was flat at 40.4%
The top-performing merchandise categories included jewelry, designer items and men's apparel. Dresses and shoes had been top-performing categories all through 2010.
During the economic downturn, the luxury sector bulked up in lower-priced retailing as demand for top-tier products slumped. Nordstrom increased its off-price footprint with its Rack clearance division.
While in recent quarters customers have returned to buying full-priced merchandise, Nordstrom has continued to open new Rack locations at a strong pace as the economy recovers. This year, Nordstrom plans for nearly two-thirds of new-store square footage to be Rack stores, though the larger namesake stores still outnumber them.
In the latest period, Rack division sales rose 20% while same-store sales climbed 1.2%.
