FINANCE

Nordstrom raises outlook on solid holiday

BY Marianne Wilson

The ranks of retailers reporting a good holiday season continues to expand.

Nordstrom’s net sales rose 2.5% for the nine weeks ended December 30, 2017. Same-store sales increased 1.2%. The company said the results reflected an improvement in Nordstrom full-line and Nordstrom Rack stores relative to year-to-date sales trends and continued growth in e-commerce.

In the Nordstrom brand (includes U.S. and Canada full-line stores and Nordstrom.com) net sales when combined with Trunk Club increased 0.7% and comparable sales inched up 1%. In the Nordstrom Rack brand (includes Nordstrom Rack stores and Nordstromrack.com/HauteLook) net sales increased 8.2% and comparable sales rose 2.9%.

Based on holiday results, the retailer updated its fiscal 2017 expectations for an increase in net sales of approximately 4.2%, inclusive of the 53rd week, and an increase in comparable sales of approximately 0.5%.

Nordstrom expects full-year earnings per diluted share to be in a range of $2.90 to $2.95, compared with its prior outlook of $2.85 to $2.95. This reflects sales performance near the high end of the company’s outlook range, continued stability in merchandise margins and expected deleverage from higher supply chain, technology, and occupancy expenses associated with Nordstrom’s growth initiatives.

Similar to other retailers, Nordstrom’s updated outlook does not incorporate the potential impact of federal tax reform.

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First Data: Electronics/appliances among holiday standouts

BY Marianne Wilson

Nearly all retail categories enjoyed solid growth this past holiday season, but some were particularly robust.

Electronics/appliances and building materials helped drive the overall seasonal growth, seeing the highest growth rates at 8.3% and 6.9%, respectively, according to First Data’s Holiday 2017 SpendTrend report. The only category with a slight decline was the sporting goods, hobby and books segment, with a 0.6% decline. (The data in the report includes only card-based forms of payment.)

Every single region of the country experienced growth in holiday spending, but the Southwest and New England regions grew the fastest, at 5.7% and 5.5%, respectively. At the other end of the scale was the Mid-Atlantic which posted growth of 0.7%.

Among the 10 largest U.S. cities, Houston ranked number one in terms of overall growth, with a 10.9% increase in spend. Following the devastating hurricane season, spending patterns indicate that people in the area are rebuilding. Building materials sales growth was up 31% and furniture sales jumped 22%.

The average ticket size for retail brick-and-mortar was $68.57, compared to $103.49 for e-commerce. The dip in the average e-commerce ticket size, which was $105.73 in 2016, along with nearly 13% growth in transaction volume suggests that more people are using online channels to purchase less expensive, everyday items than in prior years, according to the report.

Throughout the holiday season, retail spending was up 5.4%, a solid increase from last year’s growth rate of 3.6%. E-commerce accounted for 29% of all transactions, up from 26% in 2016.

For more information on the First Data report, including average ticket size, spending across various retail categories, and a deeper regional analysis, go to the firm’s website.

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Home furnishings giant to offer its first branded credit card

BY Marianne Wilson

Ikea Group will launch a co-branded rewards credit card, and also a private-label card that will provide financing options for major home projects.

Alliance Data Systems Corp. has signed an agreement to provide branded credit card services in the United States for Ikea. Alliance Data will create a loyalty-driven credit card program that combines customer insights and industry benchmarking to develop a customized rewards and benefits package tailored for Ikea’s customer base.

The co-branded rewards card, which can be used for both Ikea purchases and for everyday spending needs, will incorporate custom program perks designed to recognize customers for their loyalty. There will be no annual fee for the card.

In addition, Ikea U.S. will offer a private-label credit card, Ikea Projekt Card, that will serve as a store-branded financing solution for qualified customers doing major home decorating and renovation projects, such as a dream kitchen. The private-label card will provide special financing options, allowing customers to pay for larger purchases over time.

“Making life better and easier for the many people drives everything we do at Ikea, and we were looking for a like-minded credit marketing partner that is passionate about the same values,” said Jacqueline DeChamps, COO, Ikea U.S. “Alliance Data really understands our company and will deliver meaningful credit and loyalty programs, while constantly innovating based on our customer needs. Leveraging Alliance Data’s skillset in loyalty and marketing, we are excited about how this new partnership will enhance our customers’ shopping experience across channels with added convenience and benefits.”

Ikea operates 47 stores in the U.S. and a total of 362 in 29 countries around the world.

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