Nordstrom is no longer a luxury retailer with an off-price arm. Not only do its Nordstrom Rack discount stores outnumber its full-price locations, the cheaper chain is also outperforming its predecessor.
The Seattle-based company on Thursday reported that off-price net sales, which comprise Nordstrom Rack and its e-commerce entity as well as HauteLook, increased 12 percent to $1.13 billion in the fourth quarter, up from $1.01 billion last year. Comparable sales were up 3.6% in the three months ended Jan. 30.
Meanwhile, full-price revenue at Nordstrom and its online store increased just 0.7% to nearly $3 billion, compared with $2.97 billion a year ago, bolstered by an 11 percent leap in online sales to $782 million. Brick-and-mortar saw a 2.5% decline to $2.2 billion from last year’s $2.3 billion. Same-store sales were down 3.2%.
“Top-performing merchandise categories included beauty and shoes. Coats, younger customer-focused departments, denim and dresses continued to reflect strength in women’s apparel,” the company said in a statement, noting that the Midwest and West were the top-performing full-price geographic regions.
To that end, Nordstrom posted earnings per diluted share for the quarter of $1.00, which included asset impairment charges of $0.17, while overall net sales increased 5.2% to $4.1 billion and comps were up by one percentage point.
But analysts were expecting $4.2 billion and the news sent the company’s stock (JWN) spiraling 6.5% on Friday.
With that being said, Nordstrom expects net sales to rise 3.5-5.5% in fiscal 2016 and an increase in comps of between 0 and 2 percent. The company also anticipates earnings per diluted share of $3.10 to $3.35.
As of Jan. 30, Nordstrom operated 323 stores in 39 states, including 121 full-line stores in the U.S., Canada and Puerto Rico and 194 Nordstrom Rack stores. This year, the company plans to open three new full-line stores and 20 Nordstrom Racks.