Nordstrom Profits More Than Double

Carrying less inventory helped upscale retailer Nordstrom Inc. more than double its second-quarter profit compared with a year earlier, though it tempered its sales outlook for 2010 and its profit results fell slightly short of forecasts.

Nordstrom also said Monday that it expects to pick up market share.

The department store chain, based in Seattle, said it earned $172 million, or 77 cents per share, for the period that ended Jan. 30. A year earlier, Nordstrom earned $68 million, or 31 cents per share.

That was just short of the 79 cents per share that analysts expected, and its shares fell after closing regular trading Monday up 43 cents, at $36.13. After the earnings report was released, the shares retreated $1.13, or 3 percent, to $35 in after-hours trading.

Nordstrom’s total fourth-quarter revenues rose to $2.64 billion from $2.39 billion in the year-ago period. Analysts surveyed by Thomson Reuters expected revenue of $2.53 billion.

“We are seeing more regular-price selling as customers continue responding to our newness, value and quality,” company President Blake Nordstrom told investors during a conference call.

He said, however, that the company believes shoppers will “remain cautious.”

Nordstrom said sales at its traditional stores that have been open at least a year rose 3.9 percent. At its Nordstrom Rack discount stores, the figure rose 4.6 percent. The figure soared 32.1 percent at Nordstrom Direct, the company’s e-commerce division.

Sales at stores open at least a year is considered a key indicator of a retailer’s health because it excludes results from stores that opened or closed during the year.

Nordstrom’s gross profit, as a percentage of net sales, increased about 5.3 percentage points compared with a year earlier, when many other retailers cut prices drastically amid a sharp pullback in consumer spending.

Company executives told analysts that Nordstrom plans to open three regular-price stores and 16 Nordstrom Rack stores this year.

For the current year, Nordstrom forecasts sales at its stores that have been open at least a year will rise a modest 2 percent to 4 percent. Company executives said they expect the unemployment rate to remain at about 10 percent this year, and that will temper the full-year increase.

The sales increase will also be muted because the figure — which fell 4.2 percent for 2009 — had begun turning around by 2009’s second half.

Nordstrom expects to earn $2.35 to $2.55 per share for the full year. Analysts expect $1.94 per share.

2/22/2010 7:34 PM ANNE D'INNOCENZIO, AP Retail Writer NEW YORK