Source: Company reports/Coresight Research

Fiscal 2Q18 Results

Nordstrom reported fiscal 2Q18 net sales of $4.07 billion, up 7.2% year over year and above the consensus estimate of $3.90 billion. Diluted EPS was $0.95, above the consensus estimate of $0.84 and up 46.2% from the year-ago quarter. Nordstrom reported robust digital sales for the second quarter. The company’s digital sales grew 23% for the quarter, and accounted for 34% of the sales, compared with 20% for the same period last year, up from 29% a year ago. The company also reported record demand during the first day of its Anniversary Sale, an event featuring new arrivals at reduced prices for a limited time. Digital sales accounted for more than 40% of the event. Management noted that when customers engage with Nordstrom across stores and online, on average, they spend five times more, and the profitability per customer doubles. Comparable sales increased 4.0% in the quarter compared with the year-ago quarter. For full price, comparable sales increased 4.1%, and the top-ranking merchandise categories included kids’ apparel and beauty. Off-price comparable sales increased 4.0%. During the second quarter, sales from Nordstrom Rewards customers represented 58% of sales, compared with 56% in 2Q17. Nordstrom ended the second quarter with 372 total stores compared to 354 stores in the quarter last year. The company currently operates 134 full-price stores and 238 off-price stores. The company opened eight stores, closed two and relocated one store during the quarter.

Outlook

Nordstrom raised its full-year earnings guidance per share and expects adjusted EPS of $3.50–$3.65, compared to the consensus estimate of $3.44, up from the previous guidance, $3.35–$3.55. For the full year, the company expects total net sales to be $15.40–$15.50 billion, an increase from $15.20–$15.40 billion. The consensus estimate is $15.74 billion.