Nordstrom magic makes profit glow

If Nordstrom had a theme this year, it's this: what women want.

The upscale retailer Monday raised its full-year profit outlook for the third time this year, as customers responded to merchandise across all major categories, particularly in women's apparel.

The Seattle company reported a third-quarter profit of $135.7 million, or 52 cents a share, a 26.3 percent increase from a year ago.

Sales rose 12.4 percent to $1.87 billion.

Analysts polled by Thomson First Call had forecast a 51-cent per-share profit on sales of $1.8 billion for the quarter ended Oct. 28.

In the past year, Nordstrom has sought to re-energize its overall women's apparel business — which accounts for a third of its sales — by offering merchandise that better meets customer demand in style, price, occasion and fit.

Pete Nordstrom, who oversees the company's full-line stores, said the retailer is selling more women's apparel items at full price as it improves its "wear-to-work," casual and new fashion offerings.

"Today's result in our women's business shows that the adjustments we've made to our strategy are taking hold," he told investors.

Nordstrom, meanwhile, has zeroed in on the booming designer-apparel market by adding more merchandise and more designer products across categories, from handbags to apparel to shoes.

Nordstrom last month opened a relocated store at Westfield Topanga Mall in Canoga Park, Calif., with its most comprehensive designer offering to date.

The company in early November also began offering its "Designer Collections" for sale online — a debut that had a "a meaningful impact of sales online," Pete Nordstrom said.

Previously, customers could view designer-apparel online but had to order by phone.

For the nine months, Nordstrom reported profit of $445.7 million, or $1.67 a share, on sales of $5.9 billion.

For the full year, which ends in February, Nordstrom forecasts a profit between $2.46 and $2.51 a share.

It earlier had projected earnings of $2.31 to $2.39 a share.

The current management team, led by President Blake Nordstrom, is credited with engineering a remarkable turnaround, partly by investing heavily in a computerized inventory system that gave buyers and salespeople the data to make smarter decisions about what to sell.

Selecting handbags and designer jeans in the right styles, quantities and colors has enabled the retailer to sell more items at full price.

The company, which operates 157 stores in 27 states, said it plans to open three new stores by 2011 in Cincinnati, St. Louis and Wilmington, Del. It plans to open a relocated store in Murray, Utah, in 2009.

In related news, Nordstrom's board of directors voted to spend $32.6 million to buy back shares in the third quarter.

Nordstrom's shares closed Monday at $47.49, down 59 cents.

The company reported its financial results after the bell. The stock rose 11 cents to $47.60 in after-hours trading.

Monica Soto Ouchi: 206-515-5632 or msoto@seattletimes.com