Nordstrom, Inc. (NYSE: JWN) reported its third quarter financial results after the closing bell on Thursday. The retailer reported better-than-expected earnings, sending shares 8% higher on Friday morning.
For the quarter, Nordstrom reported earnings of USD 0.81 per share on revenue of USD 3.67 Billion. The Company surpassed Refinitiv analysts’ earnings estimates of USD 0.64 per share, however, was in-line with revenue expectations.
Net earnings during the quarter improved to USD 126 Million compared to USD 67 Million the same period a year ago. However, revenue marginally fell during the quarter compared to USD 3.74 Billion a year ago.
The stronger-than-expected earnings is due to sales trend improvement across Nordstrom’s Full-Price and Off-Price businesses. The Company noted it took aggressive actions during the year related to loyalty, digital marketing, and merchandise assortment.
In Full-Price, Nordstrom improved the economics of its Anniversary event, which the Company noted it positively contributed to merchandise margins. Off-Price delivered positive sales and earnings growth, increasing inventory turns for the eighth consecutive quarter.
Nordstrom also witnessed third quarter sales improve by 100 basis points in its Los Angeles operations. The Company is now expanding its market strategy into its New York, San Francisco, Chicago and Dallas markets by offering customers a larger selection of products for same-day pickup or next-day delivery.
Additionally, Nordstrom also launched its New York City flagship, with over 85,000 visits during the first weekend.
“Our market strategy is transforming our business model in how we’re serving customers. We have a unique mix of assets – Full-Price, Off-Price, stores, and online – and we are further linking our businesses to serve customers in new and differentiated ways. We achieved an important milestone with the opening of our New York City flagship store, significantly increasing our presence in the world’s top retail market. It’s a culmination of efforts across many teams, and we are grateful for their dedication and passion in bringing this store to life,” said Erik Nordstrom, Co-President, Nordstrom, Inc.
Based on the third quarter’s financial results, Nordstrom raised its financial outlook for the remainder of the year. For fiscal 2019, Nordstrom is anticipating earnings between USD 3.30 to USD 3.50 per share on revenue declines of approximately 2%. Previously, Nordstrom expected earnings of USD 3.25 to USD 3.50 per share on revenue declines of approximately 2%.
Despite the earnings beat, Nordstrom shares are down 20.1% this year.