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Nordstrom’ Q4 Profits Miss the Mark, Still No Go-Private Deal

Shares for Nordstrom Inc. are sliding in after-hours trading after the company posted fourth-quarter profits that missed forecasts. As of 4:45 p.m. ET, the stock remained in the red nearly 4 percent to $48.49.

The department store said its Q4 reported profits — impacted by corporate tax reform — fell 25 percent year-over-year, $151 million, or 89 cents per share. Adjusted diluted earnings per share, at $1.20, missed analyst’ bets for diluted EPS of $1.24.

Net sales advanced 8.4 percent to $4.6 billion during the period, in line with analysts’ expectations. Comp sales rose 2.6 percent, topping forecasts calling for a comp gain of 1.08 percent.

For the full year, Nordstrom said its net sales increased 4.4 percent to $15.1 billion and comparable sales increased 0.8 percent, slightly exceeding the company’s prior outlook for sales growth of 4.2 percent and comparable sales increase of approximately 0.5 percent. Diluted EPS for 2017 were $2.59, including corporate tax reform-related reductions of 31 cents, the company said.

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Among its accomplishments during the year, Nordstrom said it grew its customer base by 4 percent to 33 million; its “generational investments,” which include Nordstromrack.com/HauteLook, Canada and Trunk Club, contributed $1.5 billion in sales; and the Nordstrom Rack off-price business gained 6 million new customers with approximately one-third of off-price customers expected to cross-shop the full-price business over time.

As loyalty programs continue to rise in prominence amid digital disruption and a rising need for traditional firms to accelerate their efforts to foster long-term commitments, Nordstrom said it was able to increase its number of Rewards customers by 35 percent to 10.5 million. Sales from Nordstrom Rewards customers represented 51 percent of sales, an increase from 44 percent in 2016. (DSW and Macy’s recently revamped their loyalty programs.)

Looking ahead, the company expects fiscal 2018 net sales of $15.2 billion to $15.4 billion. Diluted EPS are forecast in the range of $3.30 to $3.35.

Reports had surfaced this week that Nordstrom’s founding family group was preparing to submit an offer to move ahead on plans to go private (an effort announced in June 2017 but suspended three months later in October).

Citing people familiar with the matter, CNBC suggested the family — which has reportedly met with investment banks over the last few weeks — was looking seal the deal before today’s earnings announcement. However, those reported efforts did not materialize.

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