Nordstrom logged a strong fourth quarter, with both revenue and profit increases. But longer-term, tough challenges remain for the upscale retailer as sales at its full-line stores continued to decline.
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While Nordstrom’s earnings for the quarter ended Jan. 28 beat Wall Street expectations, its overall comparable sales — meaning sales at stores open at least a year, and including its online operations — declined 0.9 percent.
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That was below our plan, particularly for our full-line store business, said Blake Nordstrom, company co-president. Comparable sales for those U.S. full-line stores — the large, posh apparel emporia that made Nordstrom’s name — fell 6.8 percent for the quarter, marking a sixth consecutive quarterly decline.
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Neil Saunders, managing director of GlobalData Retail, summed up the results this way: Nordstrom ends its fiscal year as a company of two halves: the mainstream business, which is struggling to grow; and the off-price business which, overall, is motoring along nicely.
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Indeed, the upscale retailer’s quarterly earnings, reported Thursday, showed a company whose results differed markedly along a couple of lines: full-price vs off-price, and bricks-and-mortar vs online.
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Nordstrom’s full-price business, which includes both U.S. full-line stores open at least a year and Nordstrom.com, saw net sales fall 2.8 percent. Its comparable sales decreased 2.9 percent from a year ago.
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The company’s off-price business, meanwhile, saw its net sales increase a healthy 10.7 percent. That segment, which includes both Nordstrom Rack stores and the online Nordstromrack.com and HauteLook, had comparable sales rise 4.3 percent.
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Nordstrom Rack’s growth in the quarter is well above overall retail growth across the period, which indicates that Rack is not only growing but is taking market share, Saunders said in an email. Just as with TJ Maxx’s buoyant results earlier in the week, this type of offer is much more aligned with consumer demand and caters for a fashion…