Nordstrom, Inc. reported earnings per diluted share of $0.72 for the first quarter ended May 3, 2014, which exceeded the Company’s prior outlook of $0.60 to $0.70. The Company continued its progress in executing its customer strategy while maintaining disciplined execution around inventory and expenses.
Nordstrom also announced it will seek a financial partner for its Nordstrom credit card receivables, which totals approximately $2 billion. The Company believes there is an opportunity to explore a financial partnership in which it can maintain its customer focus while gaining greater financial flexibility.
With any potential transaction, the Company does not expect any change to the customers’ experience and plans to retain all key aspects of the customer relationship. The Company expects any such partnership to have a minimal impact on existing operations and jobs.
There can be no assurance that the process of exploring any partnership will result in a consummated transaction. The Company does not expect to disclose further developments with respect to the process unless and until a definitive agreement is reached or the process of exploration is otherwise terminated. Any potential transaction will be subject to certain strategic and financial considerations, as well as regulatory approvals and other customary conditions. Goldman, Sachs & Co. and Guggenheim Securities, LLC are serving as financial advisors to Nordstrom in this process.
First Quarter Summary
First quarter net earnings were $140 million compared with $145 million for the same period last year. This decrease reflected planned technology investments to improve service and experience across channels and infrastructure costs related to the upcoming entry into Canada. Total Company net sales of $2.8 billion increased 6.8 percent compared with the same period in fiscal 2013 and total Company comparable sales increased 3.9 percent.
Nordstrom comparable sales, which consist of the full-line and Direct businesses, increased 3.3 percent compared with last year’s comparable sales increase of 3.1 percent. Top-performing merchandise categories included Accessories, Women’s Shoes, and Cosmetics.
Full-line comparable sales decreased 1.9 percent. The Southwest and Southern California regions were the top-performing geographic areas.
Direct net sales increased 33 percent in the first quarter, on top of last year’s first quarter increase of 25 percent, driven by expanded merchandise selection and ongoing technology investments to enhance the online experience.