Nordstrom (JWN 45.04, +1.10) has added 2.5% in pre-market after reporting mixed results for the fourth quarter.
The retailer reported above-consensus earnings of $1.27 per share on a 2.4% year-over-year increase in revenue to $4.24 billion, which was a bit shy of estimates.
Comparable store sales decreased 0.9% in the fourth quarter while full year comparable sales declined 0.4% against expectations for no change.
The decline in comparable sales did not stop the company from improving its gross margin, which increased 112 basis points to 36.0%. The increase reflected strong inventory execution and a reduction in competitive markdowns.
Fourth quarter sales in the Nordstrom brand, which includes U.S. and Canada full-line stores, Nordstrom.com, and Trunk Club, decreased 1.1% while comparable sales fell 2.7%.
Nordstrom Rack sales increased 10.7% while comparable sales grew 4.3%.
Over the course of 2017, Nordstrom expects to open two full-line stores in Canada while keeping its U.S. store count unchanged at 118. The company does plan to open 21 Nordstrom Rack stores in order to capitalize on strong growth in that area.
Looking ahead, the company expects to generate earnings between $2.75 and $3.00 per share for fiscal year 2018. This is below current market expectations. Similarly, revenue for the fiscal year is expected to come up short of estimates, totaling between $14.90 billion and $15.00 billion. Comparable store sales are expected to be flat year-over-year.