Post Earnings Coverage as Nordstrom's Sales Increased 3%; Earnings Jumped 42%
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LONDON, UK / ACCESSWIRE / May 31, 2017 / Active Wall St. announces its post-earnings coverage on Nordstrom, Inc. (NYSE: JWN). The Company posted its financial results for the first quarter fiscal 2017 (Q1 FY17) on May 11, 2017. The Seattle-based Chain reported better than expected sales and earnings numbers. Register with us now for your free membership at:
One of Nordstrom's competitors within the Apparel Stores space, The Gap, Inc. (NYSE: GPS), disclosed on May 18, 2017, its financial results for Q1 FY17. AWS will be initiating a research report on Gap in the coming days.
Today, AWS is promoting its earnings coverage on JWN; touching on GPS. Get our free coverage by signing up to:
In Q1 FY17, Nordstrom reported net sales of $3.28 billion compared to net sales of $3.19 billion in Q1 FY16. The Company's revenue number surpassed analysts' consensus estimates of $3.35 billion.
For the quarter ended April 29, 2017, Nordstrom posted gross profit of $1.13 billion, or 34.3% of net sales, compared to gross profit of $1.09 billion, or 34.2% of net sales, in Q1 FY16.
Nordstrom posted earnings before interest and taxes (EBIT) of $151 million, or 4.6% of net sales, compared with EBIT of $106 million, or 3.3% of net sales, in the prior year's corresponding period. In Q1 FY17, the Company's Credit EBIT increased $20 million on a y-o-y basis due to higher credit card revenues including a reduction in amortization expenses of $7 million related to the sale of the credit card portfolio.
Nordstrom reported Q1 FY17 net earnings of $63 million, or $0.37 per diluted earning share, compared to net earnings of $46 million, or $0.26 per diluted earning share, in Q1 FY16. On an adjusted basis, the Company posted earnings of $0.43 per share. Nordstrom's earnings exceeded Wall Street's estimates of $0.27 per share.
Segment Performance
During Q1 FY17, Nordstrom's full-line stores-US segment reported net sales of $1.48 billion, or 6.4% of comparable stores, compared to net sales of $1.58 billion, or 7.7% of comparable stores, in Q1 FY16. The segment's net sales including the US, Canada full-line stores, and Nordstrom.com decreased 1.7%, and comparable sales decreased to 2.8% when combined with trunk-club.
In Q1 FY17, Nordstrom Rack segment, which consist of Nordstrom Rack stores Nordstromrack.com/Hautelook, reported net sales of $954 million, or 0.9% of comparable stores, versus net sales of $894 million, or 0.8% of comparable stores, in the prior year. The segment's net sales for the reported quarter increased 8.7% and comparable sales grew 2.3% compared to the year ago same period.
Cash Flow and Balance sheet
In Q1 FY17, Nordstrom generated $89 million in cash from operations compared to $176 million in cash generated from operations in Q1 FY16.
Nordstrom had cash and cash equivalents balance of $653 million as on April 29, 2017, compared to balance of $470 million at the end of April 30, 2016.
Dividend share re-purchases
In a separate press release announced on May 16, 2017, Nordstrom board of director announced dividend of $0.37 per share. The dividend would be payable on June 12, 2017, to shareholders of record at the close of business on May 26, 2017.
During Q1 FY17, the Company repurchased $4.6 million shares of its common stock for $206 million. The Company has $414 million remaining under its existing share repurchase board authorization.
Store update
In Q1 FY17, Nordstrom has opened 6 Nordstrom's Rack stores and closed one full-line store. The Company posted gross square footage on April 29, 2017, of $29.76 billion compared to $28.77 billion at the end of April 30, 2016.
Outlook
For FY17, Nordstrom is expected to increase sale by 3% to 4%. The Company reiterated its FY17 earnings outlook of $2.75 to $3.00 per diluted share. Nordstrom is forecasting Retail EBIT in the range of $780 million to $840 million and, credit EBIT to approximately $140 million. The Company is expecting comparable sales to be approximately flat for FY17.
Stock Performance
At the close of trading session on Tuesday, May 30, 2017, Nordstrom's stock price slightly declined 0.07% to end the day at $42.44. A total volume of 1.66 million shares were exchanged during the session. The Company's share price has surged 11.19% in the past twelve months. The Company's shares are trading at a PE ratio of 19.93 and have a dividend yield of 3.49%. The stock currently has a market cap of $6.97 billion.
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