Nordstrom Beats on 3Q Earnings But Profit Falls

NEW YORK ( TheStreet) - High-end fashion retailer Nordstrom ( JWN) managed to beat Wall Street expectations for the third quarter, but profit fell compared to last year.

The Seattle-based company reported net income fell 6% to $137 million, or 69 cents a share, in the Nov. 2-ending quarter, compared to $146 million, or 71 cents a share, in the year-earlier quarter. Company net sales rose 2.9% to $2.79 billion; total revenue, which includes credit card revenue, came in at $2.88 billion.

Analysts, according to Thomson Reuters, expected the high-end retailer to post earnings of 66 cents a share on revenue of $2.87 billion.

Shares were falling 1.5% in post-markets trading to $62.50.

Nordstrom's total comparable store sales rose just 0.1%, benefitting from a positive 3.7% increase in Nordstrom Rack same-store sales. However, full line same-store sales decreased 4.2% in the quarter compared to a positive 8.1% growth in the prior year's quarter.

Nordstrom pointed out that last year's second and third quarters had the benefit of the retailer's Anniversary Sale, the largest sale of the year, which occurred only in the second quarter this year, shifting a benefit of approximately 6 cents per share to that quarter.

Nonetheless, the company noted that top-performing merchandise categories included cosmetics, women's shoes and specifically, in women's apparel.

Nordstrom slightly upped its full-year earnings outlook to between $3.65 and $3.70 a share compared to its prior estimate of $3.60 to $3.70 a share. Consensus estimates call for full-year earnings of $3.68 a share.

The luxury retailer narrowed expectations for total sales and same-store sales for the full year. Nordstrom expects total sales to rise 3.5% from a range of 3% to 4%. It expects same-store sales to rise 2.5% from a range of 2% to 3%.

Two other department store chains - Macy's ( M) and Kohl's ( KSS) had two very different outcomes in the third quarter.

Macy's comfortably beat consensus earnings estimates and posted strong comparable-store sales, suggesting consumers responded favorably to the retailer's promotions and selections.

The retailer also noted that top-performing categories included women's apparel and housewares as well as "cold-weather" merchandise such as hats, coats and boots.

Kohl's, on the other hand, reported lower-than-expected third-quarter results and pessimistic guidance for the holiday shopping season. Shares crumbled on Thursday, falling 8.1% to $53.55.

Investors weren't happy after same-store sales dropped 1.6% over the third quarter and gross sales of $4.44 million came in $110 million shy of consensus estimates. The department store chain didn't paint a rosy picture for the lucrative holiday shopping season either, predicting total sales declines in the range of 2% to 4% and comparable-store sales down 2% at most.

The retailer slashed its full-year earnings forecast to between $4.08 a share to $4.23 a share from a previous guidance range of $4.15 to $4.35 a share. Analysts estimate full-year net income of $4.23 a share.

Written by Laurie Kulikowski in New York. Keris Alison Lahiff contributed to this report

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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