Anniversary sale boosts Nordstrom
The retailer extends its largest event of the year -- and the strategy pays off.
By Zacks Equity Research
Leading fashion retailer Nordstrom (JWN) came up with outstanding comparable store sales (comps) for the four-week period ended Aug. 25.
Gaining largely from the shift in the timing of its largest sale event of the year -- the Anniversary Sale -- Nordstrom posted a fabulous 21% increase in comps. The event was carried out over eight days in August this year compared to only one day in 2011.
In July, the company reported a 0.9% increase in comps compared to the year-ago period. Together, July and August 2012 comps were up 8.4% from last year.
August comps at Nordstrom's two business segments -- Nordstrom full-line and Nordstrom Rack -- increased 24% and 7.1%, respectively, compared with the year-ago period. Total retail sales climbed 25.2% to $866 million from $691 million reported in August last year.
Year-to-date through Aug. 25, Nordstrom's total retail sales gained 12.1% to $6,319 million, driven by an 8% increase in comparable store sales. During the period, the company's comparable store sales at Nordstrom full-line and Nordstrom Rack segments increased 8.6% and 7.2%, respectively.
One of Nordstrom's competitors, Gap Inc. (GPS), registered a 9% rise in comparable store sales for the month of August, while net sales came in at $1.20 billion, up 9.1% compared with the prior-year period.
Store expansion plans
Nordstrom announced plans to open four new Nordstrom Rack stores in September. The stores will be in three different states, including one at Manchester Highlands in Manchester, Mo., one at Tysons Corner, Va., and two in California -- at the Carmel Mountain Plaza in San Diego and the Edinger Plaza in Huntington Beach.
Additionally, the company plans to relocate its Nordstrom Rack store at the Mall at the Source in Westbury, N.Y., to the nearby Gallery at Westbury Plaza.
As of Aug. 30, Nordstrom operated 117 Nordstrom full-line stores, 110 Nordstrom Rack, two Jeffrey boutiques, one treasure&bond store and one clearance store -- bringing the total count to 231.
Based in Seattle, Wash., Nordstrom offers high-quality apparel, shoes, cosmetics and accessories for men, women and kids. The company carries both branded and private label merchandise, as well as a private label card, two Nordstrom VISA credit cards and debit cards for Nordstrom purchases.
Nordstrom maintains a Zacks No. 2 Rank, which translates into a "short-term buy" rating. Our long-term recommendation on the stock remains "neutral."
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The solid report comes a month after the retailer closed all of its Canadian operations.
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