Nordstrom solves department store dilemma
Nordstrom has apparently figured out how to attract shoppers back to department stores, both to brick and mortar stores and online.
The Seattle-based retailer reported earnings per diluted share for the second quarter ended Aug. 4 of 95 cents, which exceeded company expectations, reflecting top-line growth across its Full-Price and Off-Price businesses. Based on first half results, the company raised its full year earnings per diluted share expectations to $3.50 to $3.65 from its prior outlook of $3.35 to $3.55.
Total company net sales increased 7.1 percent compared with the quarter ended July 29, 2017. Same store sales increased 4 percent in the quarter. In Off-Price, same store sales increased 4 percent, exceeding expectations.
Nordstrom has been leveraging a customer strategy centered on three strategic pillars: providing a compelling product offering, delivering outstanding services and experiences and leveraging the strength of the Nordstrom brand. The strategy seems to be producing strong sales and profits both in physical stores and online even as many other department store retailers founder.
In executing its digital strategy, the company increased digital sales by 23 percent in the second quarter, compared with 20 percent for the same period last year. Digital sales represented 34 percent of second quarter sales, up from 29 percent a year ago.
During the first day of its Anniversary Sale, Nordstrom achieved record digital demand, surpassing its previous peak by 80 percent.
Nordstrom's results come a day after rival Macy's disappointed with flat sales growth and JCPenney also reported a disappointing second quarter.
Nordstrom operates 372 stores in 40 states, including 122 full-line stores in the United States, Canada and Puerto Rico; 239 Nordstrom Rack stores; two Jeffrey boutiques; two clearance stores; six Trunk Club clubhouses; and its Nordstrom Local service concept. Additionally, customers are served online through Nordstrom.com, Nordstromrack.com, HauteLook, and TrunkClub.com.