In a Nutshell: Online sales continue to lead Nordstrom’s business with Nordstrom.com up 14 percent and Norstromrack.com/HauteLook up 26 percent on a year-to-date basis.
Sales at Nordstrom’s off-price business unit slowed, which the company attributes to having too much of the wrong merchandise. “This impacted our ability to provide newness, which led to softer results in the third quarter,” said co-president Blake Nordstrom. “We have made significant adjustments to our receipt plans to bring our inventories in line, and believe we’re well-positioned for the fourth quarter in this regard.”
The company adjusted its full FY17 outlook downward slightly from $2.85 to $3.00 earnings per diluted share to $2.85 to $2.95 earnings per diluted share.
Sales: Net sales for the third quarter, ended Oct. 28, were $3.5 billion with an estimated $20 million negative impact from the hurricanes. The quarter was up 2 percent when compared to the same period of 2016. Comp sales were down by 0.9% compared to the same quarter last year.
Breaking out the numbers, net sales for the Nordstrom full-line stores and online combined with Trunk Club dropped by 1.2% with comp sales down 1.9% in the quarter. Meanwhile the off-price Rack stores and Rack/HauteLook online business saw a net sales increase of 5.5% with comps up 0.8%.
Earnings: Nordstrom’s third quarter net earnings were $114 million or 67 cents per diluted share, which the company said was reduced by $0.04 from the recent hurricanes. The performance compares to a $10 million net loss or 6 cents per diluted share during the same period in 2016.
CEO’s Take: Nordstrom stated the company is focused on convenience headed into the holidays. “We’ve invested in key categories and brands that resonate most with our customers. This includes expanding our online selection and fulfillment capacity to support the peak volumes that we expect during the holidays. To make shopping faster and easier, we offer in our full-line stores buy online, pickup in-store with an option for curbside services. Also, in several markets, we have available reserve online and try in-store and same-day delivery services. Next month, we’ll offer 24-hour curbside pickup in major markets, including Seattle, Chicago, Dallas, and San Diego,” Blake Nordstrom said.
In a nutshell: J.C. Penney liquidated slow-moving inventory in the quarter, which “had a short term negative impact on profitability,” according to the company. The decision allowed the retailer to adjust its women’s business to focus more on casual and contemporary styles versus traditional pieces and led to its first positive comp for women’s apparel in 14 months.
To that end, JCP has redesigned its Liz Claiborne brand and launched a capsule with actress Tracee Ellis Ross.
Both beauty and home delivered strong positive comps in the quarter, with appliance sales doubling year over year. Going forward, the company plans to continue to identify new categories to attract consumers like toys and HD TVs.
For the full year, comp sales are expected down by 1 percent to flat and earnings per share are anticipated to be between 2 cents and 8 cents.
Sales: Net sales were down 1.8% to $2.81 billion in the third quarter ended Oct. 28, compared to $2.86 billion during the same period last year, which the company attributes to 139 store closures this year.
Comp sales increased 1.7% compared to the third quarter last year compared to a 0.8% decline during the last year period.
Earnings: The company reported a net loss of $128 million or 41 cents per share loss compared to a $67 million loss or 22 cents per share loss during the same timeframe last year. Penney’s attributes the loss in part to an increase in cost of goods sold as a result of the liquidation and costs associated with the growth in online sales.
CEO’s Take: “We are implementing our new strategy for fast frequent fashion across women’s and other categories. Our goal is to consistently deliver newness in key brands like A.N.A. and Belle & Sky to give the customers something new and exciting when they visit our stores or online. By infusing newness monthly, and in some cases even weekly, we are going to take the women’s area and give our customers a clear reason to visit us more often, more frequently to see what’s trending and what is relevant,” said chairman and CEO Marvin Ellison.
In a nutshell: Women’s apparel outperformed the overall sales trend, as did accessories, juniors’ and children’s apparel.
Sales: Net merchandise sales for the quarter were $1.31 billion, a 1 percent drop from $1.32 billion during the third quarter last year. Comp stores decreased 1 percent, dragged down by shoes and a big miss in beauty.
Earnings: Net income dropped to $14.5 million or 50 cents per share, down from $22.8 million or 67 cents per share during the same time last year.
CEO’s Take: “Hurricanes Harvey and Irma affected our two largest states, Texas and Florida, leading to a sales decline of 1 percent. Excluding these events, we believe sales would have been flat for the quarter. We were encouraged by positive sales trends in the past few weeks of the quarter, and we hope it continues,” said CEO William Dillard, II.