Nordstrom Inc. reported that third-quarter profit rose by nearly 7 percent as its affluent shoppers continue to splurge despite an uncertain economy and volatile swings in the stock market.
The upscale retailer, which released results Thursday after the regular markets closed, also upgraded its full-year profit outlook though it was below Wall Street expectations. That conservative outlook pushed shares down almost 3 percent in after-markets trading.
The chain says that it earned $127 million, or 59 cents per share, in the three-month period ended Oct. 29. That compares with $119 million, or 53 cents per share in the year-ago period. Net sales rose 14 percent to $2.38 billion, from about $2.09 billion in the year ago period. The company said its top performing categories included designer merchandise as well as handbags and dresses.
Analysts were expecting earnings per share of 59 cents on net sales of $2.35 billion. Revenue at stores opened at least a year climbed 7.9 percent for the quarter.
Like many luxury stores, Nordstrom has had rebounding sales since late 2009 as well-heeled shoppers have become more comfortable with spending despite the challenges of the weak economy that include high unemployment, wild stock market fluctuations and declining home values. But like many retailers of all stripes, Nordstrom has worked to make shopping easier for recession-weary Americans to shop.
Blake Nordstrom, president of Nordstrom, said during a conference call with analysts following the release that the company is investing in things that will help it "take advantage of more opportunities to improve service, drive sales increases, and achieve profitable growth."
The company has fused its online and in-store inventory systems, allowing shoppers to see online what's in in stock at a given store anywhere in the chain. Last year, it added Wi-Fi access for shoppers at all of its full-line department stores.
Earlier in September, Nordstrom began offering free shipping on most items without any minimum purchase requirements. Previously, Nordstrom shoppers had to spend at least $200 to get free shipping. Company officials said the program helped drive sales online, but they are still learning and watching to see its impact during the fourth quarter.
Nordstrom, based in Seattle, said it expects revenue at stores open at least a year to rise 6 percent for the full year and said it now anticipates that earnings per share will be between $3.05 and $3.10. The company said in August that it expected earnings per share for the year will be between $2.95 and $3.10. Analysts had expected $3.14 per share, according to FactSet.
Shares rose 69 cents to close at $49.62, but fell $1.22 per share to $48.40 in after markets trading.