Jewelry, Dresses and Women's Shoes perform well at Nordstrom
13 Aug '10
4 min read
Nordstrom, Inc. reported net earnings of $146 million, or $0.66 per diluted share, for the second quarter ended July 31, 2010. This represented an increase of 38.6 percent compared with net earnings of $105 million, or $0.48 per diluted share, for the same quarter last year.
Second quarter same-store sales increased 8.4 percent compared with the same period in fiscal 2009. Net sales in the second quarter were $2.42 billion, an increase of 12.7 percent compared with net sales of $2.14 billion during the same period in fiscal 2009.
Second Quarter Summary Nordstrom's second quarter performance reflects a continuation of the positive sales trends from the first quarter, resulting in a net earnings increase of $41 million compared with the same period in fiscal 2009. The company's performance was highlighted by well-executed sales events during the quarter: the Half-Yearly Sale for Women and Kids, the Half-Yearly Sale for Men, and the Anniversary Sale.
• Multi-channel same-store sales increased 9.9 percent compared with the same period in fiscal 2009. Full-line same-store sales in the second quarter increased 8.2 percent and Direct sales increased 34.1 percent compared with the same period in 2009. Same-store sales during the Anniversary Sale event increased 9.0 percent, benefiting from a shared inventory platform between full-line stores and the Direct business that allowed better fulfillment of customer demand. Top-performing multi-channel merchandise categories included Jewelry, Dresses and Women's Shoes. The Midwest and South regions were the top-performing geographic areas for full-line stores relative to the second quarter of 2009. During the second quarter, the company relocated one Nordstrom full-line store in Cerritos, California (Los Cerritos Center). • Nordstrom Rack same-store sales declined 0.9 percent compared with the same period in fiscal 2009. During the second quarter the company opened one Nordstrom Rack store in Manhattan (Union Square). • Gross profit, as a percentage of net sales, increased 133 basis points compared with last year's second quarter. The improvement was mainly driven by merchandise margin as a percentage of net sales, but also from slightly reduced buying and occupancy costs as a percentage of net sales. The company ended the quarter with sales per square foot up 8.3 percent and inventory per square foot up 8.7 percent compared with the second quarter of 2009. • Retail selling, general and administrative expenses, as a percentage of net sales, increased approximately 60 basis points compared with last year's second quarter. This reflects planned increases in organizational, marketing and technology expenses as the company invests in expanding its capabilities. This was coupled with increased fulfillment costs as the company used its multi-channel inventory platform to better serve customers. • Credit selling, general and administrative expenses declined $12 million compared with last year's second quarter. This decrease reflects a $15 million reduction in our reserve for bad debt based on improvement in credit trends. Delinquencies as a percentage of accounts receivable at the end of the second quarter were 3.5 percent, down from 4.2 percent at the end of the first quarter of 2010 and 3.6 percent at the end of the second quarter of 2009.
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