The Seattle-based retailer reported same-store sales that rose 4 percent in the latest quarter, exceeding analyst expectations and sending shares up as much as 14 percent in late trading.
The better-than-expected results mark a welcome change for a domestic department-store sector that’s faced a tough week. While Macy Inc.’s raised its earnings and revenue guidance for the year on Wednesday, a spike in spending to win back shoppers sent shares down 16 percent, making it the day’s worst performer in the S&P 500 Index. The pain continued Thursday as J.C. Penney Co.’s lacklustre results drove its shares down 27 percent and prompted one analyst to call the stock “worthless.”
Nordstrom broke the mold, with a 23 percent gain in e-commerce sales helping to fuel the better results. The company has been ramping up sales at its discount-focused Rack chain in an effort to avoid having to put items at its full-price stores on sale.
It’s also experimented with an inventory-free store, opened a men’s store in Manhattan in April and will be launching a women’s location across the street in the fall of 2019. At the men’s store, customers can purchase items online and then pick them up at the location 24-hours a day, even if the store is closed.
The news adds to what has been a good year for Nordstrom investors. The stock has climbed about 10 percent since the start of the year, outpacing the gain in the S&P 500 Index. In March, after failing to agree on a buyout price, Nordstrom’s board and the Nordstrom family ended talks about taking the company private.
The chain raised its full-year earnings outlook to between $3.50 and $3.65 a share from its prior outlook of $3.35 to $3.55.
By Hema Parmar; editor: Anne Riley Moffat and Jonathan Roeder