Nordstrom Inc. today reported better-than-expected earnings, as sales soared in its off-price Nordstrom Rack business but remained tepid in full-line stores.
Overall, the department store chain’s first-quarter sales increased 2.7 percent, to $3.3 billion, in line with market watchers’ expectations. Comparable sales decreased 0.8 percent, missing analysts’ bets for flat comp growth.
By division, sales for the Nordstrom brand, including U.S. and Canadian full-line stores and Nordstrom.com, decreased 1.7 percent, and comparable sales decreased 2.8 percent. For the Nordstrom Rack brand, which consists of Nordstrom Rack stores and Nordstromrack.com/HauteLook, net sales increased 8.7 percent, and comparable sales increased 2.3 percent.
Profits rose 27 percent year-over-year, to $63 million, or 37 cents per diluted share. Adjusted profits, at 43 cents per share, topped market watchers’ forecasts of 27 cents for diluted EPS.
Across U.S. full-line stores and Nordstrom.com, the company said its top-performing merchandise categories were men’s and women’s apparel.
The company maintained its full-year outlook.
Shares for Nordstrom had been in the red for much of the trading day, after Macy’s Inc. delivered a lackluster earnings report, which investors may have interpreted as a signal that the department store category continued to struggle in Q1.
Pressured by consumer shifts to online and experiential spending, Macy’s, Sears and JCPenney announced plans to shutter multiple doors in recent months. Meanwhile, Nordstrom said that it would slash 400 jobs as it shifts more resources to digital growth.
As of 4:45 p.m. ET, Nordstrom shares were down 2.4 percent in after-hours trading, to $45.13.