Nordstrom reported earnings per diluted share of $0.67 for the second quarter ended July 30, 2016, which exceeded company expectations.
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Second quarter net earnings were $117 million and earnings before interest and taxes (EBIT) were $221 million, or 6.1 percent of net sales, compared with net earnings of $211 million and EBIT of $377 million, or 10.5 percent of net sales, during the same period in fiscal 2015.
Total net sales of $3.6 billion for the second quarter decreased 0.2 percent compared with net sales of $3.6 billion during the same period in fiscal 2015. Total company comparable sales for the second quarter decreased 1.2 percent.
Gross profit, as a percentage of net sales, of 34.3 percent decreased 101 basis points compared with the same period in fiscal 2015, due to increased markdowns to align inventory to current trends and higher occupancy expenses related to new store growth.
Through the company's actions to realign inventory and combined with the strength of its Anniversary Sale, inventory growth of 1.4 percent was in-line with a net sales decrease of 0.2 percent.
Nordstrom selling, general and administrative expenses, as a percentage of net sales, of 29.8 percent increased 212 basis points compared with the same period in fiscal 2015, primarily due to a $64 million benefit in fiscal 2015 associated with the sale of the credit card portfolio
The increase was also attributable to expense deleverage from the shift in sales volume into the third quarter related to the Anniversary Sale event.
To build on the success of the Nordstrom Rewards loyalty program, the company expanded its program in the second quarter to enable all customers to earn benefits regardless of how they choose to pay.
Through this expanded program, Nordstrom has approximately 6 million active Rewards customers, up nearly 30 percent from 4.7 million in the prior quarter.
During the six months ended July 30, 2016, the company repurchased 1.3 million shares of its common stock for $60 million. A total capacity of $751 million remains available under its existing share repurchase board authorizations.
Return on invested capital (ROIC) for the 12 fiscal months ended July 30, 2016 was 9.1 percent compared with 12.3 percent in the prior 12-month period. This decrease was primarily due to reduced earnings. â–
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