Nordstrom Fourth-Quarter Profit Drops - Erik Nordstrom Named CEO

Nordstrom, the high-end retailer, reported fourth-quarter net income per share fell 17% on 1.2% higher revenue. And it reported a change at the top: Instead of having two co-presidents, it named Erik Nordstrom CEO and Pete Nordstrom president.
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Nordstrom  (JWN) - Get Report, the Seattle high-end retailer, reported fiscal-fourth-quarter net income per share fell 17% on 1.2% higher revenue.

And the company reported a change at the top: Instead of two co-presidents, it named Erik Nordstrom chief executive of the parent and Pete Nordstrom president of the parent and chief brand officer. Both executives remain on the board. 

For the quarter ended Feb. 1, Nordstrom earned $1.23 a share compared with $1.48 in the year-earlier quarter. The latest figure included a 19-cent charge that wasn't reflected in guidance, Nordstrom said. 

Shares outstanding fell 6.3% to 156.6 million. Revenue reached $4.54 billion from $4.48 billion.

A survey of analysts by FactSet produced consensus estimates of earnings of $1.47 a share on sales of $4.56 billion.

At last check after hours Nordstrom shares were down 7.3%. After a broad-market selloff on Tuesday, they closed the regular session down 2.9% at $33.44. 

Tuesday's regular session marked an eighth straight day of losses for JWN shares, a stretch during which the stock lost a total of almost 19%.

Nordstrom said the 19-cent charge stems from the costs of integrating the Trunk Club personal-styling service plus debt-refinancing costs. 

Net sales rose 1% in full-price merchandise and 1.8% in off-price. Digital sales grew climbed 9% and were 35% of total sales, the company said.

Gross-profit margin in Q4 narrowed 0.09 percentage point to 35%, hurt by costs tied to its loyalty program and to the occupancy of its Manhattan flagship store. The costs were offset partly by wider margins on merchandise.

Selling, general and administrative expense was 30.5% of sales, 0.7 percentage point up from a year earlier.

The company said the title changes reflect the Nordstroms' current and continuing responsibilities. 

Nordstrom also said the board would in the next two years reduce membership to 10 directors from 11. And it plans to institute a 10-year term limit for independent directors.