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Nordstrom: a must-know guide to the high-end department store

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Part 9
Nordstrom: a must-know guide to the high-end department store PART 9 OF 14

Nordstrom’s revenues helped by online business, Rack stores

Better than peers

Revenue and earnings growth for Nordstrom (JWN) have been quite uneven over the past five years. However, the company has performed better than its peers in the department store industry due to aggressive growth in Nordstrom’s online business and the expansion of Nordstrom Rack stores.

The SPDR S&P Retail ETF (XRT) and the Consumer Discretionary Select Sector SPDR Fund (XLY) have 1.01% and 0.50% holdings in Nordstrom, respectively.

Nordstrom&#8217;s revenues helped by online business, Rack stores

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Fiscal 2013 performance

In fiscal 2013, Nordstrom’s revenues increased by 3.3% to $12.5 billion. Adjusted EPS (or earnings per share) was up 4.2% compared to the prior year. Strong sales growth in the online channel and in Nordstrom Rack stores offset lower sales in the company’s full-line stores. Same-store sales growth in fiscal 2013 was 2.5%.

Nordstrom’s peers in the department store category had disappointing same-store sales for fiscal 2013. Macy’s (M), Dillard’s (DDS), and Kohl’s (KSS) reported same-store sales of 1.90%, 1.00%, and -1.20%, respectively.

Most recent performance

In the third quarter of fiscal 2014, Nordstrom’s revenues increased by 8.9% to $3.1 billion. Adjusted EPS increased by 5.8% to $0.73. Accessories, cosmetics, and men’s apparel delivered strong performance, and same-store sales increased by 3.9%.

Fiscal 2014 guidance lowered

Nordstrom lowered its fiscal 2014 EPS guidance to the range of $3.70–$3.75 from its prior outlook of $3.80–$3.90 due to the impact of the Trunk Club acquisition. In August 2014, Nordstrom bought Trunk Club, a personalized men’s clothing service provider, in an all-stock transaction of $357 million.

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