Nordstrom Q2 profit falls 11%; accelerating expansion on Nordstrom Rack
Seattle -- Nordstrom on Thursday reported an 11% decline in its second quarter profit, with its performance affected by the timing of its biggest sale of the year. The retailer also raised its profit and sales outlook for the year, and said it would accelerate the expansion of its Nordstrom Rack outlet-store concept.
Nordstrom's net income for the quarter ended on July 28 fell to $156 million, from $175 million. Net sales, which include results from the full-line and direct businesses, increased 6.1% to $139 million compared with the same period in fiscal 2011.
Same-store sales were up 4.5%. Same-stores sales rose 1.1% at the company’s full-service department stores and 7.7% at its Rack outlets.
Nordstrom noted that its Anniversary Sale event, historically the company's largest sale of the year, started one week later in July relative to last year.
The company said it plans to accelerate the growth of its Nordstrom Rack concept, given the strong performance of the business and availability of quality locations. Its initial plan for 15 store openings in 2012 remains, but will increase to 24 openings in 2013.
Nordstrom plans to have over 230 Rack stores by the end of 2016. Currently, there are 110 Nordstrom Rack locations.
Nordstrom said its direct channel continued to show strong sales growth with an increase of 40%, significantly outpacing the company’s overall performance and reflecting its ongoing initiatives in e-commerce.