High-end retailer Nordstrom Inc. (JWN) has reported strong third quarter 2009 results with net income of $83 million or 38 cents per share compared to $71 million or 33 cents per share in the year-earlier quarter. The earnings marginally beat the Zacks Consensus Estimate by a penny.
The year-over-year increase in earnings was primarily due to an improvement in same-store sales in each month of the quarter through prudent inventory management policies that focused on sales trends. Quarter-end inventory per square foot declined 10.7% versus the year-ago period. Overall gross profit of the company (as a percentage of sales) increased approximately 90 bps during the quarter compared to the year-earlier quarter.
By segment, same-store sales decreased 4.2% during the quarter in Full-line stores, increased 16.4% in Nordstrom Direct and 3.0% in Nordstrom Rack. During the quarter, the company reported a $10 million increase in retail selling, general and administrative expenses due to an increase in operating costs related to the opening of new stores, along with an increase in variable expenses.
Nordstrom expects to open 3 full-line stores and 15 Nordstrom Rack stores in 2010. Capital expenditures are anticipated in the range of $325 million to $375 million in fiscal year 2010. At third quarter end, Nordstrom had cash and cash equivalents of $484 million. Cash flow from operating activities was $801 million during the quarter versus $454 million in the year-ago quarter.
With an improved performance during the quarter, Nordstrom has increased its earlier earnings guidance for the fiscal year 2009 from $1.50 – $1.65 per share to $1.83 – $1.88.
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