CORRECTED-BRIEF-American Savings Bank reports Q1 net income of $15.8 mln
* American Savings Bank net income of $15.8 million for Q1 of 2017 compared to $12.7 million in Q1 of 2016
* Sees FY EPS $3.65-$3.80 vs Street view $3.97
* Sees FY same-store sales up 3.5-5.5 pct
* Plans capital expenditures of $750-790 mln
* Shares down 2.1 percent in after-hours trading
By Phil Wahba
Feb 21 Nordstrom Inc on Thursday said it would spend far more money this year on building out its e-commerce capacity and expanding its chain of discount Rack stores, leading to a profit forecast that disappointed Wall Street.
Industry analysts widely regard Nordstrom as an e-commerce leader among bricks and mortar retailers, reaping the fruits of hundreds of millions in investments in recent years that have paid off: direct sales hit $1 billion for the first time in the recently ended fiscal year.
In the last 12 months, the fast-growing high end retailer has announced plans to expand into Canada, double the size of its Rack chain, and open its first Manhattan department store.
But that will cost money. Nordstrom said its capital expenses would be between $750 million and $790 million this year alone, well above last year's $450 million.
"To be clear, we are a growth story with a business and operating model consistent with that," Blake Nordstrom, the company president, told analysts on an investment call.
For the current fiscal year, which began Feb. 3, Nordstrom expects a profit of $3.65 to $3.80 per share, while Wall Street analysts were projecting $3.97 per share, according to Thomson Reuters I/B/E/S.
Shares slipped 2.1 percent to $53.35 in after-hours trading.
"They like growth, but they like growth in the bottom line too," said Morningstar analyst Paul Swinand, speaking of investors impatient to see a quicker payoff.
Nordstrom Chief Financial Officer Mike Koppel said on the call that sales at the Rack, Canada and online could account for half of company revenues in five years.
The company plans to spend about one quarter of its five-year capital expense budget of $3.7 billion on further developing its e-commerce, another 25 percent on its Canadian and Manhattan stores, and the rest on U.S. store expansion.
For the fourth quarter, which included the Black Friday to Christmas period, same-store sales at Rack stores rose 7.1 percent, far above the 2.2 percent clip at its department stores. Overall same-store sales were up 6.3 percent.
Nordstrom forecast same-store sales will rise between 3.5 percent and 5.5 percent this year.
The retailer reported net income for the quarter ended Feb. 2 of $284 million, or $1.40 share, compared to $236 million, or $1.11 per share, a year earlier. That was 6 cents better than Wall Street expected.
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