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Nordstrom's 4Q net income rises 35 percent

NEW YORK – Tighter inventory controls, a lower credit card delinquencies and a holiday rebound in full-price sales helped upscale department store chain Nordstrom Inc.'s fourth-quarter profit rise 35 percent, the company said Thursday.

The retailer also announced it is buying flash-sale website HauteLook for $180 million in stock, a testament to the changing buying habits of luxury shoppers.

Investors seems disappointed with a muted sales forecast and sent Nordstrom shares down $1.38, or 3 percent, after hours to $45.10, despite an upbeat profit outlook for 2011.

Nordstrom reported net income of $232 million, or $1.04 per share, for the quarter that ended Jan. 29. That compares with $172 million, or 77 cents per share, a year earlier. Its quarterly revenue reached $2.92 billion, an increase of more than 10 percent from a year earlier.

Revenue at stores open at least a year rose 6.7 percent. The comparison is a key indicator of a retailer's health because it excludes stores that opened or closed during the year.

Analysts expected adjusted earnings of 99 cents per share on revenue of $2.83 billion, according to FactSet.

HauteLook Inc. is a leader among private-sale websites, where access is often limited and each sale, usually of designer clothes and shoes, lasts just a couple days. Nordstrom said buying the website will build on its own success selling goods through multiple channels.

The retailer has fused its online and in-store inventory systems, allowing shoppers to see online what's in stock at a given store anywhere in the chain. Starting last November, Nordstrom added Wi-Fi access for shoppers at all its full-line department stores.

The HauteLook deal includes up to $90 million in additional payments. Nordstrom said some of the $180 million in stock has not yet vested. The website will operate as a wholly owned subsidiary.

"We know the way our customers shop for fashion is changing rapidly," Blake Nordstrom, the company's president, said during a conference call with analysts after the stock market closed and the company released its report. "The online business is an important cornerstone of our growth strategy, and HauteLook will contribute to our overall results in this space."

Founded in 2007, HauteLook mushroomed during the recession, along with other discount luxury flash-sale sites like RueLaLa and Gilte Groupe, as shoppers focused on discounts. The sites are still growing, with a 70 percent increase in customer traffic from January 2010 to January 2011, according to Internet research firm Experian Marketing Services.

For 2011, Nordstrom expects to earn $2.95 to $3.10 per share. Analysts forecast $3.04 on average, according to FactSet.

Nordstrom expects revenue at stores open at least a year to rise between 2 percent and 4 percent for 2011. But that's slower than the 8.1 percent increase Nordstrom achieved in its latest fiscal year.

The company said that full-price sales have returned to pre-recession levels.

he company's lower-price Nordstrom Rack division did better than it has in recent quarters, drawing $93 million in revenue, up 24.1 percent from a year earlier. That division's revenue at stores open at least a year rose 3.9 percent from a year earlier.

For the fiscal year that ended in January, Nordstrom reported net income of $613 million, or $2.75 per share, up from $441 million, or $2.01 per share in fiscal 2009. Its revenue rose almost 13 percent to $9.31 billion.

During regular trading Thursday, Nordstrom shares fell 22 cents to close at $46.48.