* Q3 EPS 38 cents misses Wall Street view by a penny
* Q3 revenue up 3.5 pct to $1.87 bln, beats Street view
* Raises outlook, sees fiscal 2009 EPS $1.83 to $1.88
* Shares down 5 percent
(Adds detail on debt reserve, capex, update shares, byline)
By Alexandria Sage and Phil Wahba
SAN FRANCISCO/NEW YORK, Nov 12 Nordstrom Inc
(JWN.N) forecast a drop in full-year same-store sales and posted a
quarterly profit slightly below Wall Street expectations, raising
doubts about its holiday-season performance and sending its shares
down more than 4 percent.
The upscale retailer raised its full-year earnings forecast,
but analysts questioned whether it could meet the earnings numbers
after it said it expects same-store sales to be down 6 to 7
percent for its fiscal 2009.
Nordstrom's mid-priced rivals Macy's Inc (M.N) and Kohl's
(KSS.N) have tried to dial down investor expectations about their
holiday sales this week, forecasting earnings at the low end of
Wall Street estimates. [ID:nN11421601] [ID:nN12403080]
"The shares' drop is a function of missing the estimates and a
lack of confidence they can meet guidance for the holiday
quarter," said Brian Sozzi, an analyst with Wall Street
The unpredictable economy and questions surrounding where
unemployment is headed have made company forecasts less reliable,
Nordstrom expects earnings between $1.83 to $1.88 for the 2009
fiscal year ending on Jan. 30, an increase from an earlier view of
$1.50 to $1.65.
Toon van Beeck, senior industry analyst at IBISWorld, said the
overall results were positive, but called the same-store sales
decline expected for the full year "quite steep."
"There really is a lot of uncertainty left in the market.
There's no harm in underestimating ... and then overshooting when
the time comes," van Beeck said.
Nordstrom posted a net profit of $83 million, or 38 cents per
share in the third quarter ended Oct. 31, up from $71 million, or
33 cents per share, a year earlier. Revenue rose 3.5 percent to
Analysts, on average, had been expecting a profit of 39 cents
per share and sales of $1.78 billion during the quarter, according
to Thomson Reuters I/B/E/S.
Nordstrom said its best-performing categories at Nordstrom
stores and online were jewelry, finer apparel for women and
"Although there is continued uncertainty around consumer
spending, the company experienced an improving trend in same-store
sales in each month of the quarter while effectively managing
inventory and expenses," the company said in a statement.
Gross profit rose by 90 basis points in the quarter, helped in
part by controlled inventory levels, which fell per square foot by
10.7 percent from the year-ago period.
Nordstrom said it raised its bad debt reserve for credit card
delinquencies by $6 million based on current credit trends.
Capital expenditures will be approximately $325 million to
$375 million in fiscal 2010, above the approximately $280 million
in fiscal 2009.
Shares fell to $32.74 in extended trading after closing at
$34.51 on the New York Stock Exchange.
(Reporting by Alexandria Sage and Phil Wahba; Editing by Andre
Grenon, Gary Hill, Phil Berlowitz)