Essay Example on Nordstrom operates 356 stores including 121 full line Stores

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Nordstrom operates 356 stores including 121 full line stores in the United States Canada and Puerto Rico and 221 Nordstrom Rack stores In 2017 the total company net sales increased 3 5 percent and comparable sales increased 1 7 percent compared with the same quarter last year Nordstrom continued its progress in executing its customer strategy while maintaining discipline around inventory and expenses As a result of the Company's ongoing efforts to provide newness and limited distribution product to customers Nordstrom proprietary labels represented three of the top five selling brands during the Anniversary Sale In executing its digital strategy the Company delivered online sales growth of 20 percent at Nordstrom com reflecting its largest volume day in company history and 27 percent at Nordstromrack com HauteLook The Nordstrom Rewards loyalty program continues to play an important role in reaching new customers and strengthening existing customer relationships The Company has 9 4 million active Rewards customers in the U S and Canada up approximately 50 percent from 6 2 million a year ago Sales from Nordstrom Rewards customers represented 56 percent of second quarter sales compared with 48 percent a year ago SECOND QUARTER SUMMARY Second quarter net earnings were 110 million and earnings before interest and taxes EBIT were 217 million or 5 8 percent of net sales compared with net earnings of 117 million and EBIT of 221 million or 6 1 percent of net sales during the same period in fiscal 2016 o Retail EBIT decreased 27 million compared with the same quarter last year primarily reflecting planned technology occupancy and supply chain expenses supporting the 



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Company's growth initiatives o Credit EBIT increased 23 million through the strategic partnership with TD Bank Credit card revenues increased 30 percent which included a reduction in amortization expenses of 5 million related to the sale of the credit card portfolio in October 2015 Total Company net sales of 3 7 billion for the second quarter increased 3 5 percent compared with net sales of 3 6 billion during the same period in fiscal 2016 Total Company comparable sales for the second quarter increased 1 7 percent compared with the same quarter last year o In the Nordstrom brand including U S and Canada full line stores and Nordstrom com net sales when combined with Trunk Club increased 2 4 percent and comparable sales increased 1 4 percent The top performing merchandise categories were Women s Apparel and Beauty The East was the top ranking U S geographic region o In the Nordstrom Rack brand which consists of Nordstrom Rack stores and Nordstromrack com HauteLook net sales increased 9 8 percent and comparable sales increased 3 1 percent The East was the top ranking geographic region Retail gross profit as a percentage of net sales of 34 1 percent decreased 25 basis points compared with the same period in fiscal 2016 This primarily reflected higher occupancy expenses related to new store growth for Nordstrom Rack and Canada in addition to higher loyalty expenses during the Anniversary Sale This was partially offset by improved merchandise margins reflecting the continued strength in regular price selling Net sales growth of 3 5 percent exceeded inventory growth of 2 2 percent Selling general and administrative expenses as a percentage of net sales of 30 3 percent increased 46 basis points compared with the same period in fiscal 2016 reflected planned technology and supply chain expenses associated with the Company's growth initiatives


Return on invested capital ROIC for the 12 fiscal months ended July 29 2017 was 8 9 percent compared with 9 1 percent in the prior 12 month period Results for the current period were negatively impacted by approximately 310 basis points due to the Trunk Club non cash goodwill impairment charge in the third quarter of 2016 A reconciliation of this non GAAP financial measure to the closest GAAP measure is included below The retailer posted 201 million in net earnings during the three month period ended Jan 28 or 1 15 per diluted share vs net earnings of 180 million during the fourth quarter the previous year or 1 a share Net sales saw a 2 4 uptick to 4 2 billion in the quarter But sales at stores open at least a year a common industry measure of a company's health slid 0 9 Nordstrom's financial results reflect a period that preceded the retailer announcing earlier this month that it would no longer carry Ivanka Trump's fashion line That decision sparked the wrath of President Donald Trump who tweeted that the store chain was treating his daughter unfairly Nordstrom said at the time that the move was motivated by the brand s declining sales not politics and its stock price saw an uptick Jones 2017 Some of the long term initiatives for Nordstrom include investing in e commerce closing underperforming stores and investing


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