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Shares of Nordstrom Inc. rallied after hours on Thursday after the upscale department-store chain reported second-quarter results that topped Wall Street’s estimates, helped by better results at its namesake stores and its off-price Nordstrom Rack locations.
The company reported second-quarter net income of $137 million, or 84 cents a share, compared with $126 million, or 77 cents a share, in the same quarter last year. Nordstrom’s adjusted earnings per share also came in at 84 cents.
Revenue fell to $3.77 billion from $4.09 billion in the prior-year quarter, with the company’s decision to wind down its business in Canada earlier this year still weighing on results.
Analysts polled by FactSet expected Nordstrom to report adjusted earnings per share of 45 cents, on revenue of $3.68 billion and a same-store sales decline of 9.4%.
“Our annual Anniversary Sale was a successful event, especially among our most loyal customers,” Pete Nordstrom, the chain’s chief brand officer, said in a statement. “We were pleased by strong sell-through of new merchandise from the best brands, both in stores and online. In the second quarter, we were also encouraged by sequential improvement in sales trends at both Nordstrom and Rack.”
Second-quarter net sales at Nordstrom banner stores fell 10.1% year over year, but that was a bit better than the 11.4% decline seen in the first quarter. Nordstrom Rack net sales fell 4.1% year over year, but that decline was more modest than the first quarter’s 11.9% drop.
The company said that sales in active and beauty items grew in the “low single digits.” It said children’s apparel and men’s clothing “performed better than average” during the quarter.
Management stuck with its full-year outlook for a 4% to 6% drop in sales, with adjusted earnings per share of $1.80 to $2.20.
Shares were up 4.2% in after-hours trading.
The results add to what has been a mixed bag for the retailers reporting quarterly results this month.
In May, Nordstrom said that its higher-income customers, who are less likely to be spooked by the current bout of inflation, were “resilient” but “cautious.” And it said that its off-price Nordstrom Rack stores were helping to draw new customers.
Results from Urban Outfitters Inc. this week initially gave shares of that retail chain a boost, although those gains later evaporated. Still, the chain said customers at its higher-end Free People and Anthropologie chains — which together make up a majority of the company’s sales — were choosing “fashion over price.“
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