* 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
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
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.