Yahoo Finance Nordstrom’s 4Q14 sales beats estimates, stock surges
Nordstrom: Strong 2014 earnings keep expansion plans on track (Part 2 of 9)
Fourth-quarter results
Nordstrom (JWN) announced its 4Q14 and full-year results on February 19, 2015. Department stores like Nordstrom derive their revenues from the sale of consumer discretionary items such as apparel. The Consumer Discretionary Select Sector SPDR Fund (XLY) and the iShares Global Consumer Discretionary ETF (RXI) have 0.40% and 0.30% exposure to Nordstrom, respectively.
4Q14 sales exceed expectations
Nordstrom’s 4Q14 sales surged by 8.9% to $4.04 billion, well over the results from the same quarter last year. New Nordstrom Rack stores and the online channel each registered strong sales growth. The cosmetics, accessories, and men’s apparel categories performed well in the quarter. Nordstrom’s 4Q14 sales growth was better than some of its peers in the department-store category including Macy’s (M), Dillard’s (DDS), and TJX Companies (TJX).
Nordstrom exceeded analysts’ sales expectations of $4.01 billion for the quarter. So, since the company announced the results following the close of financial markets on February 19, 2015, Nordstrom’s shares surged by 6% on February 20.
Fiscal 2014 performance
In fiscal 2014 ended January 31, 2015, the company’s net sales increased by 7.7% to $13.5 billion. A decline in full-line store sales was more than offset by strong online sales, and growth at Nordstrom Rack stores. Rack stores and online sales currently account for over 40% of the company’s sales, compared to 30% three years ago.
Nordstrom’s retail segment, which includes full-line, Rack, and online channels, accounts for 97% of the company’s net sales, while the remaining 3% comes from the credit card segment. The retail segment sales increased by 7.8% to $13.1 billion. Credit card revenues increased by 5.9% or $22 million.
The company’s top line also benefitted from the August 2014 acquisition of Trunk Club. Trunk Club is a men’s clothing and personal styling company.
The Nordstrom Rewards loyalty program helped the company strengthen existing relationships as well as reach new consumers. In fiscal 2014, Nordstrom opened over one million new accounts for a total 4.3 million active members, representing 40% of sales.
Nordstrom’s fourth-quarter results were mixed. Strong sales didn’t boost the company’s earnings as you might expect.
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