Jewellery (jewelry)

By David Moin Nordstrom isn’t about to let a tough fourth quarter and soft outlook for the year deter its long-term objectives.

The Seattle-based specialty chain reported Monday that for the fourth quarter ended Feb. 2, net earnings dropped 8.6 percent to $212 million, or 92 cents a diluted share, from $232 million, or 89 cents, in the corresponding period a year earlier.

Total sales reached $2.5 billion, a 4.4 percent drop from $2.6 billion in last year’s fourth quarter. Comp-sales declined 0.7 percent, not too far off the chain’s plan for flat sales. The company noted that the fourth quarter of 2006 had 53 weeks compared with the normal 52.

And in one of the strongest indications yet that the tough U.S. economy has begun to impact higher-end retailing, Nordstrom projected a decline of 3 to 5 percent in comp-store sales in the first quarter of 2008 and earnings per share of 49 to 54 cents. For 2008, the company projected earnings per diluted share of $2.75 to $2.90, and flat to negative 2 percent comps.

However, store executives assured Wall Street analysts that despite the numbers, Nordstrom’s aggressive program of full-line store openings and elevating assortments with additional designer and upscale merchandise remains intact. They also said they worked hard to reduce bloated inventories last quarter, and feel confident their core customers will continue to purchase at higher rates than the average shopper across the country.

“Our long-term strategy is the right one,” Blake Nordstrom, president, said during a conference call after the market closed Monday. “We have confidence we can grow in new markets and add stores in existing markets.”

The plan is ambitious ? to take the retailer to 140 to 150 stores by 2015, from the current 102.

“There may be current economic issues, but we feel we are well-positioned now and for the future” to get greater market share and share of the customers’ wallet, Blake Nordstrom said.

Shares of Nordstrom rose 98 cents, or 2.7 percent, to close at $36.98 on the New York Stock Exchange Monday. Earnings were announced after market close.

But the retailer isn’t overlooking the bumpy road ahead in 2008. As Nordstrom said, “In the short term we face challenges in women’s apparel [overall] and regionally in California, in particular.” He also acknowledged that in the fourth quarter, “We had more markdowns than in previous years.” The company overbought in the second half and had to cancel certain orders.
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