Nordstrom Inc. (JWN: 34.54 +0.85 +2.52%), a leading specialty retailer in the U.S., reported June same-store sales of 14.1%, conveniently beating Wall Street expectation of 9.1% on the back of a 66.3% increase in Direct and a 12.7% increase in full-line same-store sales. In June 2009, same-store sales declined 10%. Overall revenues for the month climbed 19.8% to $822 million, up from $686 million in June last year.The timing shift of Nordstrom’s Half-Yearly Sale for Women and Kids also boosted multi-channel June same-store sales by 350–400 basis points (bps). Half-Yearly events for Women, Kids as well as Men saw a same-store sales increase in the high single digits. The performance also indicates customers’ positive response towards full-priced merchandise.
Category-wise, dresses, jewelry and women’s shoes outperformed in the merchandise section, while on a geographical basis, Midwest, Mid-Atlantic, and Northwest regions helped the company to post a robust performance.
June results also led to an 8.9% increase in the quarter-to-date same-store sales, as well as a 10.6% year-over-year ramp up in year-to-date same-store sales. Moreover, quarter-to-date total revenues also increased 14% to $1.53 billion while year-to-date total revenues jumped 15.5% to $3.52 billion, on a year-over-year basis.
We expect Nordstrom’s merchandising initiatives, growth of online businesses, and investments in technology and infrastructure to drive fundamental improvement. However, we remain cautious on Nordstrom as its business is seasonal in nature and generates a large proportion of sales during the fiscal second and fourth quarters, which are characterized by the company’s anniversary sale and holiday seasons.
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