Nordstrom (NYSE:JWN) released strong results for the fourth quarter of fiscal year 2016, which included the important holiday quarter. Nordstrom reported fourth-quarter adjusted earnings per share of $1.37, beating the $1.15 expected by analysts polled by FactSet. The company reported adjusted earnings per share of $1.00 in the same quarter a year ago.
The off-price Nordstrom Rack brand and the e-commerce business continued to drive performance for the company. Same-store sales for the Rack business increased 4.3 percent for the quarter. Nordstrom.com sales reached more than $2.5 billion in 2016, representing about a quarter of the company’s full-price sales.
Sales totaled $4.32 billion, slightly lower than the $4.35 billion FactSet estimate. Same-store sales fell 0.9 percent for the quarter. As of 11:02 a.m. EST, the stock had gained 5.3 percent. Nordstrom shares are down 11 percent for the past year.
Nordstrom has also announced that it will invest more than $3 billion back into the company in the coming years. Chief Financial Officer Michael Koppel said about 40 percent of that would be going towards modernizing the company’s technology platform, digital and mobile upgrades, and expanding the company’s fulfillment network.
Nordstrom came under fire during the latest quarter when it announced that it would be dropping Ivanka Trump’s fashion line from its stores. The company explained that it was a business decision, not a political one. Sales of Ivanka’s footwear and apparel lines fell 32 percent in the last fiscal year and declines accelerated as the presidential election approached. Nordstrom’s currently offers merchandise from a number of limited distribution brands, including J. Crew and Beyonce’s Ivy Park.
President Trump attacked the retail chain on Twitter for treating his daughter “unfairly.” After Trump’s tweet, celebrities Rosie O’Donnell, Michael Moore, Kristen Davis, Aisha Tylor and Chelsea Handler all shared photos of their shopping sprees at the store in support of its decision, while supporters of the president, like Scott Baio, announced that they would be boycotting the store.
The president’s unhappy response didn’t seem to hurt the company’s bottom line. Nordstrom shares momentarily dropped after Trump’s tweet, but recovered in just four minutes. Peter Nordstrom, the company’s president of merchandising, said during the earnings call that the effect on the quarterly results was “not really discernible one way or the other.”
Nordstrom has also released its guidance for 2017. The company expects total revenue growth of 3 percent to 4 percent on flat comparable sales for the year. Earnings per share for 2017 is expected to be between $2.75 to $3.00, lower than 2016’s adjusted EPS of $3.14.