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Q2 ROIC at retailer Nordstrom slips 80 basis points

August 16, 2014 (United States Of America)

Return on invested capital (ROIC) for the 12 months ended August 2, 2014 at garment retailer and NYSE-listed Nordstrom stood at 13.2 percent, down from 14.4 percent from same period last year.

Nordstrom said, this decrease reflects increased capital expenditures related to store expansion and online growth.

In the second quarter of 2014 ended August 2, 2014, Nordstrom posted earnings per diluted share of $0.95 against $0.93, from a year earlier.

Net sales went up 6.2 percent to $3.3 billion versus $3.1 billion during the same period in fiscal 2013, while comparable sales rose 3.3 percent year-on-year.

Net earnings in second quarter of 2014 amounted to $183 million and were comparable to the same period last year.

Earnings before interest and taxes were $331 million, or 10.1 percent of net sales, compared with $335 million, or 10.8 percent of net sales, for the same quarter last year.

This quarter’s net earnings included planned additional fulfilment and technology investments to improve service and experience across channels and approximately $5 million in incremental infrastructure and pre-opening costs related to the upcoming entry into Canada, it said.

Nordstrom comparable sales, which consists of the full-line and direct business increased 2.7 percent from the prior year period.

Of this, full-line comparable sales were down 1.2 percent, while direct net sales increased 22 percent in the second quarter, primarily driven by expanded merchandise selection.

Nordstrom Rack net sales increased $114 million, or 18 percent, compared with the same period in fiscal 2013, reflecting incremental volume from existing stores and the impact of 25 store openings from a year earlier.

Gross profit as a percentage of net sales at Nordstrom was 35.4 percent, down from same quarter of 2013, which it attributed to planned occupancy costs associated with Nordstrom Rack’s accelerated store expansion.

Ending inventory per square foot increased 19.2 percent compared with the same period in fiscal 2013, which outpaced the sales per square foot increase of 2.7 percent.

SG&A expenses as a percentage of net sales stood at 28.3 percent, an increase of 66 basis points compared with the same period in fiscal 2013.

During the quarter, Nordstrom repurchased 1.7 million shares of its common stock for $119 million and a total of $359 million remains under existing share repurchase board authorization, it said.


Fibre2fashion News Desk - India
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