Nordstrom Earnings Continue to Wow Investors With Bottom-Line Beat

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Nordstrom Inc. (NYSE: JWN) reported its fiscal second-quarter financial results after the markets closed on Thursday. After seeing its shares climb on Thursday some might have thought that this stock used all of its powder ahead of earnings, but this retail giant has more to show with an incredible bottom-line earnings beat.

The company posted that it had $0.67 in earnings per share (EPS) on $3.65 billion in revenue. There were consensus estimates from Thomson Reuters that called for $0.56 in EPS on $3.68 billion in revenue. The same period from last year had $0.93 in EPS on $3.7 billion in revenue.

Total company net sales decreased 0.2% and comparable sales decreased 1.2%, compared with the same period last year.

In terms of the outlook for the 2016 full year, the company maintained its expectations more or less in-line. Nordstrom expects to have net sales increase by 2.5% to 4.5%, comparable sales to either decrease by 1% or increase by 1%. The only update to guidance was the EPS which the company moved up to the range of $2.60 to $2.75 from the previous range of $2.50 to $2.70. There are consensus estimates that are calling for $2.57 in EPS on $14.77 billion in revenue for the full-year.

Across U.S., the top-performing merchandise categories were Beauty and Shoes. The younger customer-focused departments in Women’s Apparel continued to outperform, demonstrating strength in denim and collaborations with new and emerging brands that have limited distribution. The Midwest was the top-performing geographic region.

During the six months ended in July, the company repurchased 1.3 million shares of its common stock for $60 million. There is $751 million available under the remaining share repurchase board authorizations.

Blake Nordstrom, Co-President of Nordstrom, commented on earnings:

Over the past several quarters, our team has been actively addressing our inventory, expense and capital, and in the second quarter, made substantial progress by bringing down inventory in-line with sales. Those efforts, along with the strength of our Anniversary Sale and a great response from customers to that event, drove better than expected results for the second quarter.

On the books, cash and cash equivalents totaled $892 million at the end of the quarter, versus $423 million in the same period from the previous year.

Shares of Nordstrom closed Thursday up 7.5% at $47.56, with a consensus analyst price target of $41.40 and a 52-week trading range of $35.01 to $79.98. Following the release of the earnings report, the stock was initially up 12% at $53.24 in the after-hours trading session.