Nordstrom Profit Tops Estimates as Rack Brand’s Sales Increase

SEATTLE, United States — Nordstrom Inc., the largest US luxury department-store chain, posted second-quarter profit that topped analysts' estimates, helped by higher sales at its off-price Rack chain.

Earnings were 67 cents a share in the quarter, the Seattle-based company said in a statement Thursday. Analysts predicted 57 cents, on average. Sales slipped 1.4 percent to $3.65 billion, just missing the $3.68 billion projected.

The shares rose 12 percent to $53.10 at 4:08 p.m. in late trading in New York following the report. That followed a 7.5 percent gain during regular trading.

Nordstrom has been investing in its Rack business and building its e-commerce offerings as shoppers shift their spending online and to discount retailers. With mall traffic remaining sluggish, Nordstrom also has been slashing costs and reducing its capital investments. The retailer expanded its loyalty programme as well, opening it to all shoppers, rather than just those using a Nordstrom credit card.

Net sales for the Rack brand — which includes the chain’s website and HauteLook — rose 11 percent in the quarter.

By Lindsey Rupp; editors: Kevin Orland and Mark Schoifet.