Net earnings were $145 million compared with $149 million for the same quarter last year.
Total Company net sales of $2.7 billion for the first quarter increased 4.8 percent compared with net sales of $2.5 billion during the same period in fiscal 2012. Total Company same-store sales increased 2.7 percent compared with the same period in fiscal 2012, on top of last year’s same-store sales increase of 8.5 percent.
First quarter performance was consistent with the lower end of the Company’s expectations as lower than planned sales volume was mitigated by the Company’s management of inventory and expenses.
While in the first two months of the quarter the Company experienced particularly soft sales trends in seasonal merchandise and geographically in the Northeast, Mid-Atlantic and Midwest regions, overall sales trends showed improvement in April.
The Company continues to expect annual earnings per diluted share consistent with the previous outlook of $3.65 to $3.80. This reflects full-year same-store sales increases of 3 to 5 percent and incorporates the performance of the first quarter. It also includes the impact of share repurchases in the first quarter, which is expected to increase earnings per diluted share by approximately $0.05.
FIRST QUARTER SUMMARY
Nordstrom same-store sales, which consist of the full-line and Direct businesses, increased 3.1 percent. Top-performing merchandise categories included Cosmetics, Women’s Apparel and Handbags. Women’s Apparel outpaced the multi-channel average for the third consecutive quarter.
Full-line same-store sales were flat compared with last year’s same-store sales increase of 5.6 percent. The Northern California and Southwest regions were the top-performing geographic areas relative to the first quarter of 2012.
Direct continued to generate strong sales growth with an increase of 25 percent in the first quarter on top of last year’s increase of 44 percent.
Nordstrom Rack net sales increased $58 million, or 10 percent, compared with the same period in fiscal 2012, reflecting 16 new store openings since the first quarter of fiscal 2012. Same-store sales increased 0.8 percent for the Rack on top of last year’s same-store sales increase of 6.8 percent.
Gross profit, as a percentage of net sales, decreased 50 basis points compared with the same period in fiscal 2012. The decrease reflected higher occupancy costs related to the accelerated Rack store expansion, combined with lower than planned sales volume. The decrease was also due to higher expenses associated with the growth in the Fashion Rewards program.
Ending inventory per square foot increased 5.9 percent compared with the same period infiscal 2012. This outpaced sales per square foot growth of 2.3 percent for the quarter and was attributable to the planned investment in pack and hold inventory at Nordstrom Rack.
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