* Q3 EPS 71 cents vs View 72 cents
* Now sees bigger FY drop in gross margin, retail SGA
* Shares down 3.8 pct in after-hours trading
By Phil Wahba
Nov 8 Nordstrom Inc on Thursday said it
expected an even bigger impact on this year's gross margin from
its efforts to win more customers through its loyalty program
and anticipates spending more on its growing e-commerce
The high-end retailer, which also operates the Nordstrom
Rack chain of lower-priced outlet stores, now expects its gross
profit margins to fall by at least 0.4 percentage point,
compared to a previous floor of 0.35 points, as it spends money
on its Fashion Rewards program, an essential tool for winning
over shoppers and gathering data on their spending habits.
It also now expects to spend at least $340 million in the
fiscal year ending in January on expenses that include
investments in its online business, up from a minimum of $325
million. Online sales rose 38 percent last quarter.
"They need to make sure the online experience is at the
same level as the in-store experience," said Morningstar analyst
Shares were down $2.15 at $53.25 in after-hours trading,
following a 3.2 percent drop in regular trading before the
results were released.
The investments prevented Nordstrom from raising the top end
of its fiscal-year profit forecast. The company now expects to
earn $3.45 to $3.50 per share, compared with a previous range of
$3.40 to $3.50 per share and analysts' forecasts of a $3.49 per
share profit, according to Thomson Reuters I/B/E/S.
Nordstrom now expects same-store sales to rise 6.5 percent
to 7 percent this year, versus an earlier forecast of a 6
percent to 7 percent increase.
Nordstrom's net income for the quarter ended on Oct. 27 rose
15 percent to $146 million, or 71 cents per share, from $127
million, or 59 cents per share, a year earlier. That was 1 cent
below analyst expectations.
As previously reported, revenue rose 13.8 percent to $2.71
billion, while same-store sales were up 10.7 percent.