Nordstrom (NYSE:JWN) on Thursday fell short of Wall Street’s quarterly earnings expectations as its off-price chain Rack outperformed the rest of its stores.
Despite the earnings miss, the Seattle-based department store operator posted sales growth and stuck by its full-year forecast.
The chain lost 24 cents per share in the quarter, compared to eight cents expected, on revenue of $3.34 billion vs. $3.20 billion expected.
For its fiscal first quarter, Nordstrom posted a net loss of $39 million, versus a net loss of $205 million in the prior-year period. The company’s total revenue rose to $3.34 billion from $3.18 billion in the previous year.
Nordstrom shares took on $1.05, or 5%, in early Friday trading, to $22.09.
Nordstrom has leaned on its off-price chain, Nordstrom Rack, to drive growth. It has been opening more Rack stores, including nine during the quarter. It is on track to open a total of 22 new Rack stores this year.
Yet, Rack, which offers brand names at cheaper prices, has lagged behind rivals such as TJX-owned T.J. Maxx and Marshalls.
In the quarter, however, the off-price chain showed signs of progress. It outperformed Nordstrom’s flagship brand with comparable sales rising 7.9% year over year. Comparable sales for the company’s flagship brand climbed 1.8%.
The retailer reaffirmed that it expects earnings of $1.65 to $2.05 for the full fiscal year. Nordstrom anticipates full-year revenue will be in a range of a 2% decline to 1% growth from the prior year.
