WRAPUP 1-Kohl's, Nordstrom beat forecasts, raise 2009 views

* Kohl's Q1 EPS $0.45 vs Street's $0.44

* Nordstrom Q1 EPS 31 cents vs Street's 26 cents

* Kohl's ups FY EPS view to $2.19-$2.42, pvs $2.00-$2.30

* Nordstrom ups FY EPS vis to $1.25-$1.50, pvs $1.10-$1.40 (Recasts with Nordstrom results, comment, byline)

By Aarthi Sivaraman and Alexandria Sage

NEW YORK/SAN FRANCISCO, May 14 (Reuters) - Kohl's Corp (KSS.N) and Nordstrom Inc (JWN.N) beat quarterly profit estimates and raised their 2009 earnings views, defying a still precarious environment for department stores in which both well-to-do and budget shoppers are paring back.

Their results, helped by tighter expense controls and leaner inventories, presented investors with a speck of good news about a struggling industry that has endured months of dismal sales amid the recession.

But Kohl's raised forecast was still below Wall Street estimates and its shares closed the regular session down 1.7 percent and held steady in after-hours trading. Nordstrom shares, which gained over 3 percent in regular trading, added another 3 percent after hours.

Despite a 32 percent drop in quarterly net profit, upscale chain Nordstrom cited lower costs, lean inventory and credit card revenue, tempered by increasing bad debt expenses, for its brighter 2009 earnings outlook.

Profit margins improved at Kohl's, a mid-price department store, and the company cited gains in market share as sales rose a meager 0.4 percent.

That outshone Nordstrom's 9.2 percent fall in sales and sharp revenue drops at rivals, all of which have struggled to entice consumers to spend in the face of fear of job losses, home foreclosures and tight access to credit.

Analysts cautioned the retail sector remained in the doldrums.

"It tells us it's tough out there. You'd better be managing your inventory with an iron fist and owning your credit card business has significant risk, perhaps greater risk than people realize," said Stifel Nicolaus analyst Richard Jaffe, who has a "hold" rating on both companies.

Macy's Inc (M.N) posted a 9.5 percent drop in first-quarter sales on Wednesday and stuck to its forecast for sales to fall for the full year. [ID:nN13395810]

DISCOUNTERS OUTPERFORM?

When they do spend, consumers have sought deep discounts -- a trend likely to persist and help Kohl's, said Liz Dunn, a Thomas Weisel analyst.