With help from its Anniversary Sale, growing digital business and off-price concept, Nordstrom Inc. today produced Q2 results that were mostly better than expected.
The department store chain’s shares are gaining in after-hours trading — up nearly 2 percent to $45.75 as of 4:25 p.m. ET.
The company said its net sales gained 3.5 percent year-over-year to $3.71 billion, roughly in line to slightly below analysts’ forecasts for sales of $3.75 billion. Total comps gained about 1.7 percent year-over-year, according to the company, handily besting estimates for a comp decline of 0.5 percent.
In the Nordstrom brand, including U.S. and Canada full-line stores and Nordstrom.com, net sales, when combined with Trunk Club, increased 2.4 percent, and comparable sales increased 1.4 percent. In the Nordstrom Rack brand, which comprises Nordstrom Rack stores and Nordstromrack.com/HauteLook, net sales increased 9.8 percent, and comparable sales increased 3.1 percent.
During the quarter, digital sales were a bright spot for the company — which announced in April 2016 that it would slash hundreds of jobs as a part of a larger effort to shift resources online — growing 20 percent at Nordstrom.com, reflecting its largest volume day in company history, and 27 percent at Nordstromrack.com and HauteLook.
Net income fell 6 percent compared with the prior year’s comparable period to $110 million, or 65 cents per share — a modest beat on estimates for diluted earnings per share of 64 cents.
Looking ahead, Nordstrom upped its annual outlook expectations for earnings per diluted share to incorporate second-quarter results. Nordstrom now expects diluted EPS in the range of $2.85 to $3, compared with the prior range of $2.75 to $3. Net sales are also expected to gain 4 percent during the year, which is on the higher end of previous range of 3 percent to 4 percent.
Investors seem to be responding more favorably to Nordstrom’s report than those of competitors Macy’s Inc. and Kohl’s Corp., which have both seen their stocks stay in the red for much of the day even after posting better-than-expected second-quarter results.