Shares of Nordstrom (JWN) are up 8% after the luxury department store chain posted a second-quarter profit that surpassed Wall Street’s forecasts.
The Seattle-based company announced earnings per share (EPS) of $0.96 U.S., which blew past the $0.71 U.S. that had been expected among analysts.
However, revenue in the quarter slightly missed forecasts, coming in at $3.89 billion U.S. compared to $3.90 billion U.S. that was the consensus estimate. Sales were up 3.4% from a year earlier.
Last year, Nordstrom reported a net loss of $67 million U.S. in the first six months of 2023. During the same period this year, the company posted a profit of $83 million U.S.
Management at Nordstrom attributed the strong earnings to ongoing efforts to lower costs and boost efficiencies.
Across the company, comparable sales increased 1.9% while gross merchandise value rose 3.5%.
Nordstrom has been working to improve its supply chain. Last quarter, it said the time it takes for online orders to be filled and delivered was more than 5% faster.
Another key focus for the company has been growing its off-price banner, called Nordstrom Rack. During this year’s second quarter, sales at Nordstrom Rack were up 8.8%, while comparable sales increased 4.1% year over year.
That compares to Nordstrom’s main stores, which saw net sales and comparable sales increase 0.9%. Nordstrom has a goal to open 22 new Rack outlets by the end of this year.
Despite the strong Q2, Nordstrom issued cautious forward guidance for the full year.
The company said it now expects earnings of $1.75 U.S. to $2.05 U.S. That compares to a previous range of $1.65 U.S. to $2.05 U.S.
Sales are expected to be in a range of a 1% decline to 1% growth from the previous year. That compares to previous guidance that had called for down 2% to up 1%.
Prior to today (Aug. 28), the stock of Nordstrom had risen 16% this year to trade at $21.14 U.S. per share.
