Upscale department store operator,
) reported fourth quarter fiscal 2012 earnings of $1.40 per
share, above the Zacks Consensus Estimate of $1.34. Quarterly
earnings gained 26.1% from the prior-year period earnings of
$1.11 per share.
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For fiscal 2012, the company's earnings per share soared 13.4%
year over year to $3.56, while it beat the Zacks Consensus
Estimate of $3.50.
Nordstrom's same-store sales and top-line trends also remained
encouraging driven by robust performance at the company's stores
as well as the inclusion of an additional week in fiscal 2012.
Total revenue rose 13.3% during the quarter to $3,702 million and
surpassed the Zacks Consensus Estimate of $3,686 million.
Total revenue for the quarter reflected a 13.5% increase in Net
Retail sales to $3,596 million and 9.3% increase in Credit Card
revenues to $106 million.
Total revenue grew 11.7% to $12,148 million in fiscal 2012,
comprising $11,762 million (up 12.1% year over year) from Net
Retail Sales and $386 million (up 1.6%) from Credit Card
revenues. It also surpassed the Zacks Consensus Estimate of
Comps for the fourth quarter gained 6.3% on top of the year-ago
quarter, comprising a 2.2% increase in Nordstrom full-line store
comps, 31% increase in Direct Sales comps and 7.1% increase in
Nordstrom Rack store comps. Fiscal 2012 comps registered growth
of 7.3% compared to a 7.2% increase last year.
Moreover, Nordstrom's comps (including full-line and direct
businesses) strengthened 6.1% during the quarter, driven by
robust performance in Men's Apparel, Cosmetics, Women's Apparel
and Kids' Apparel categories.
Driven by the increased expenses related to the Fashion Rewards
program that aims at enhancing customer relations, offset by
markdown gains, Nordstrom's gross profit margin for the quarter
contracted 10 basis points to 39.5% compared to 39.6% in the
Further, retail selling, general and administrative expenses
elevated 11.5% to $912 million in the quarter. However, as a
percentage of total revenue, it contracted 40 basis points to
24.6% from the year-ago quarter, mainly due to leverage on higher
sales, partly offset by higher fulfillment costs related to
accelerating the delivery for shipped sales.
On the other hand, credit selling, general and administrative
expenses declined 8.6% year over year to $53 million.
Consequently, Nordstrom's operating income augmented 20% to $498
million compared with $417 million reported in the prior-year
period, while operating margin expanded 70 bps to 13.5%.
Balance Sheet and Cash Flow
Nordstrom ended the year with cash and cash equivalents of $1,285
million compared with $1,877 million at the end of fiscal 2011.
Long-term debt at year-end stood at $3,124 million. During fiscal
2012, Nordstrom generated $1,110 million in cash from operations.
Capital expenditures as of Feb 2, 2013 were $513 million. During
the fourth quarter, the company bought back nearly 4.2 million
shares for about $219 million.
Looking ahead, the company forecasts fiscal 2013 earnings per
share excluding the impact of future share repurchases, in the
range of $3.65 - $3.80 per share, based on estimated sales growth
of 4.5% to 6.5%. The current Zacks Consensus Estimate is pegged
at $3.96 per share. The company projects total same-store sales
growth in the range of 3.5% - 5.5%.
Moreover, management projects retail selling, general and
administrative expenses, as a percentage of retail sales, to
decline 10 to 30 basis points. Further, gross margin is expected
to contract between 10 bps and 30 bps year over year.
In fiscal 2013, the company expects capital expenditure, net of
property incentives, to be in the range of $750 - $790 million,
which are slated towards the development of its Rack and
full-line stores as well as enhancement of its e-Commerce sales.
We believe that this upscale department store chain will continue
to report better financial results in the near future. It is also
expected to continue attracting more shoppers with its various
sales channels as well as offers. Nordstrom currently has a Zacks
Rank #2 (Buy).
Other stocks that are performing well in the retail-apparel/shoe
Citi Trends Inc.
Abercrombie & Fitch Co.
), all of which carry a Zacks Rank #1 (Strong Buy).