Nordstrom, Inc.'s earnings climb 43.8% in the first quarter to $116 million, or 52 cents per diluted share, from $81 million, or 37 cents per diluted share, for the same quarter last year.
First quarter same-store sales increased 12.0% compared with the same period in fiscal 2009. Net sales in the first quarter were $1.99 billion, an increase of 16.7% compared with net sales of $1.71 billion during the same period in fiscal 2009.
FIRST QUARTER SUMMARY
Nordstrom's first quarter performance continued the sales momentum experienced throughout the latter half of 2009. The company's ongoing progress in serving its customers with a compelling blend of fashion, newness, and quality, led to same-store sales increases in each month of the quarter.
* Multi-channel same-store sales increased 13.7% compared with the same period in fiscal 2009. Full-line same-store sales in the first quarter increased 11.7% and Direct sales increased 38.7% compared to the same period in 2009. Top-performing merchandise categories for multi-channel included Jewelry, Dresses and Women's Shoes. The Midwest, Northeast, and South regions were the top-performing geographic areas for full-line stores relative to the first quarter of 2009. During the first quarter, the company opened two Nordstrom full-line stores.
* Nordstrom Rack continued to experience positive performance with a same-store sales increase of 1.9% in the first quarter compared with the same period in fiscal 2009. During the first quarter, the company opened six Nordstrom Rack stores.
* Gross profit, as a percentage of net sales, increased approximately 245 basis points compared with last year's first quarter. The improvement was mainly driven by merchandise margin, as a percentage of net sales, but also from reduced buying and occupancy costs as a percentage of net sales. The company ended the quarter with sales per square foot up 13.0% and inventory per square foot up 1.9% compared with the first quarter of 2009.
* Retail selling, general and administrative expenses, as a percentage of net sales, increased approximately 60 basis points primarily due to the timing of performance-related expenses, and to a lesser extent, due to planned expenses related to new stores and technology. This increase in performance-related expense in the quarter is reflective of the improvement in the company's sales and earnings performance over its plan, and better visibility into operating trends relative to the first quarter of 2009.
* Credit selling, general, and administrative expenses were flat compared with last year's first quarter. Bad debt expense decreased $4 million compared with the first quarter of 2009. The decrease in bad debt expense reflects recent improvements in our credit trends. Delinquencies as a percentage of ending accounts receivable during the first quarter were 4.2%, which is a sequential improvement of 110 basis points compared with the fourth quarter of 2009 and reflects delinquency rates comparable to those experienced during the first half of 2009.
* Earnings before interest and taxes increased to $219 million, or 10.5 percent of total revenues, from $146 million, or 8.1% of total revenues, in last year's first quarter.