Nordstrom Q1 profit slips but tops estimates; 20 stores on tap by year-end
Seattle — Nordstrom Inc.’s net income for the first quarter fell 3% to $140 million from $145 million in the year ago period, reflecting heavy investments in technology to support omnichannel initiatives and the retailer’s debut in Canada. Its earnings still topped Street views. The company plans to open three full-line stores and 17 Nordstrom Rack stores during the remainder of fiscal 2014
Revenue for the quarter ended May 3, 2014 rose 6.8% to $2.93 billion from $2.75 billion, with top-performing categories including accessories, women’s shoes, and cosmetics.
Same-store sales increased 3.9%, topping the 1.3% gain analysts had forecast. Same-store sales fell 1.9% at Nordstrom full-line stores and rose 6.4% at Nordstrom Rack outlets. Direct (includes e-commerce) sales grew by 33% in the quarter on top of a 25% prior year increase.
Nordstrom also announced it will seek a financial partner for its Nordstrom credit card receivables, which totals approximately $2 billion. The company said believes there is an opportunity to explore a financial partnership in which it can maintain its customer focus while gaining greater financial flexibility.
Nordstrom ended the quarter with 117 full line stores, the same as the prior year, while the number of Rack outlets increased to 150 locations from 128.
Walmart To Go, Bentonville, Arkansas
Walmart’s new convenience store test concept, Walmart To Go, is located in its hometown of Bentonville, Arkansas.
The approximate 2,500-sq.-ft. store is a hybrid. Part grocery store, part c-store and part quick-serve restaurant, it offers a mix of groceries, c-store staples, and refrigerated and fresh prepared foods, complete with a deli counter. Products are priced the same as they would be in a regular Walmart store.
Walmart To Go also sells gasoline, with a covered awning accented with the retailer’s iconic sunburst over the fuel stations. A large awning also covers the area from the pump area to the store. There is also a picnic area with tables outside for customers who want to eat onsite.
Design: api(+), Tampa, Florida
Dillard’s sidesteps stubborn winter in first quarter
While other retailers saw sales affected by a winter that overstayed its welcome, Dillard’s marked its 15th consecutive quarter of positive sales.
Despite weak sales in home and furniture, Dillard’s said sales trends in the first quarter were strongest in the men’s apparel and accessories category and the juniors’ and children’s apparel category followed by ladies’ accessories and lingerie.
The retailer reported total merchandise sales for the quarter of $1.539 billion, a 1% increase from $1.530 billion for the prior-year period. Comparable-store sales increased 2%.
Sales trends were strongest in the Central region, followed by the Eastern and Western regions, respectively.
“We reported record earnings per share of $2.56 compared to $2.50. Our 2% comparable store sales increase marks our 15th consecutive quarter of positive sales. Additionally, we executed $65.9 million of share buyback as a result of our strong cash flow,” said CEO William Dillard II.
Gross margin from retail operations decreased 14 basis points of sales for the quarter compared to the first quarter last year. The decline resulted primarily from increased markdowns compared to the prior-year first quarter.
At May 3, the company operated 278 Dillard’s locations and 18 clearance centers spanning 29 states, as well as its e-commerce site.