Nordstrom Q2 profit falls 11%; accelerating expansion on Nordstrom Rack
Seattle — Nordstrom on Thursday reported an 11% decline in its second quarter profit, with its performance affected by the timing of its biggest sale of the year. The retailer also raised its profit and sales outlook for the year, and said it would accelerate the expansion of its Nordstrom Rack outlet-store concept.
Nordstrom’s net income for the quarter ended on July 28 fell to $156 million, from $175 million. Net sales, which include results from the full-line and direct businesses, increased 6.1% to $139 million compared with the same period in fiscal 2011.
Same-store sales were up 4.5%. Same-stores sales rose 1.1% at the company’s full-service department stores and 7.7% at its Rack outlets.
Nordstrom noted that its Anniversary Sale event, historically the company’s largest sale of the year, started one week later in July relative to last year.
The company said it plans to accelerate the growth of its Nordstrom Rack concept, given the strong performance of the business and availability of quality locations. Its initial plan for 15 store openings in 2012 remains, but will increase to 24 openings in 2013.
Nordstrom plans to have over 230 Rack stores by the end of 2016. Currently, there are 110 Nordstrom Rack locations.
Nordstrom said its direct channel continued to show strong sales growth with an increase of 40%, significantly outpacing the company’s overall performance and reflecting its ongoing initiatives in e-commerce.
ComScore: Online spending up 15% in Q2
Reston, Va. — U.S. online retail spending reached $43.2 billion for the second quarter, up 15% over a year ago, according to comScore.
It was the eleventh consecutive quarter of positive year-over-year growth and seventh consecutive quarter of double-digit growth. The top-performing online product categories were: digital content & subscriptions, consumer electronics, flowers, greetings and gifts, computer hardware, apparel and Accessories. Each category grew at least 16% over a year ago.
“While the second quarter’s 15% growth rate couldn’t quite match the especially high growth rate from the first quarter, it was nevertheless almost four times higher than the growth in overall consumer spending, a sign of continued strength in the e-commerce channel,” said comScore chairman Gian Fulgoni.
Although e-commerce remains strong, comScore is taking a cautious view of the second half of the year in light of some renewed signs of economic uncertainty and a stubbornly high unemployment rate, Fulgoni added.
“So, even as commerce increasingly shifts to the online channel, any significant future pullback in overall consumer spending could dampen the strong double-digit growth rates we’ve been experiencing for the year-to-date,” he said.
Lane Bryant launches new branding campaign
Columbus, Ohio — Lane Bryant is launching a new national marketing and brand initiative beginning in September with a comprehensive print ad campaign, a fresh and modern brand logo and color palette, with updated in-store visuals, web and social media sites. This will be the company’s first comprehensive branding and marketing effort since 2008.
Debuting in September issues of select fashion and lifestyle publications, the campaign stars some of the plus size industry’s most notable models. The rebranding also includes Lane Bryant’s exclusive intimate apparel brand Caciqu.