Nordstrom Comps Delivers Yet Again (GPS) (JWN)

Zacks

Same-store sales at Nordstrom Inc. (JWN) grew by 6.6% for the four-week period ended July 30, 2011. Total retail sales in July 2011 climbed 11.5% to $993 million from $890 million for the four-week period ended July 31, 2010.

The rise in July 2011 comparable store sales is primarily driven by the company’s 'Anniversary Sale', which recorded a 6.7% year-over-year increase. July is typically the second largest sales month for Nordstrom.

Moreover, Nordstrom's second-quarter 2011 comparable sales grew by 7.3% compared with the prior-year quarter. Total retail sales for the quarter increased 12.4% to $2.72 billion from $2.42 billion reported in the prior-year quarter. Nordstrom's year-to-date same store sales surged 6.9%. During the reported period, the company's total retail sales surged 12.2% to $4.95 billion from $4.41 billion in the prior-year period.

As of July 2, 2011, Nordstrom had 116 Nordstrom full-line stores, 95 Nordstrom Racks, 2 Jeffrey boutiques and 1 clearance store. Same-store sales at Nordstrom stores (includes Nordstrom full-line stores and Direct) increased 7.1% in July, while Nordstrom Rack reported a rise of 3.9% for the four-week period ended July 30, 2011. However, same store sales at Nordstrom stores climbed 7.9% in the second quarter coupled with a 4.8% increase in Nordstrom Rack. Year-to-date, the company reported an increase of 7.8% in same store sales at Nordstrom stores with an increase of 3.0% in Nordstrom Rack.

Peer Performance

Gap Inc. (GPS), a Nordstrom competitor, registered a decline of 2.0% in same-store sales in July 2011, while its net sales came in at $949.0 million compared with $948.0 million in the year-ago period.

Conclusion

Nordstrom remains focused on expanding the store network to drive top-line growth. However, a sluggish discretionary spending environment, intense competition and exposure to seasonal fluctuations keep us on the sidelines.

Based in Seattle, Washington, Nordstrom Inc. is a leading fashion specialty retailer in the U.S., offering high quality apparel, shoes, cosmetics and accessories for men, women and kids. The company offers 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's shares maintain a Zacks #2 Rank, which translates into a short-term 'Buy' rating. Our long-term recommendation on the stock remains 'Neutral'.

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