Nordstrom Inc.'s second-quarter profit rose as the retailer recorded a $51 million gain related to the planned sale of its U.S. credit-card portfolio to Toronto-Dominion Bank.
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The Seattle retailer, which said it expects to receive about $1.8 billion from the deal, raised its financial projections for the year to account for the sale.
Nordstrom projects profit of $3.85 to $3.95 a share with net sales increasing 8.5% to 9.5% and sales at established stores up 3.5% to 4.5%. Previously, it guided for profit of $3.65 to $3.80 a share, with sales increasing between 7% and 9% and comparable sales improving between 2% and 4%.
Nordstrom defines comparable sales, a key metric for retailers, as sales at stores open for at least a year, including online sales.
Shares, down nearly 6% this year, rose almost 6% to $79.37 in late trading.
Founded in 1901 as a shoe shop in Seattle, the company, now in the hands of the fourth generation of Nordstroms, operates more than 300 stores in the U.S. and associated websites under its namesake brand, along with discount chain Nordstrom Rack, Jeffrey boutiques, clearance store Last Chance, Trunk Club and online retailer HauteLook.
Next month, Nordstrom plans to open its third store in Canada, a flagship store in Vancouver, as part of a push to open six full-line stores in the country, where it targets more than $1 billion in sales. It plans to open cheaper Rack shops starting in the fall 2017.
In the latest period, sales rose 9.2% from the year earlier, while sales at established stores rose 4.9%.
Overall, for the period ended Aug. 1, Nordstrom reported a profit of $211 million, or $1.09 a share, compared with $183 million, or 95 cents a share, a year earlier.
Revenue, which includes revenue from its credit cards, rose 9% to $3.7 billion.
Analysts surveyed by Thomson Reuters expected profit of 90 cents a share on $3.67 billion in sales.
Inventory rose 11% from the year-ago period. Nordstrom said the increase reflected its planned expansion in Canada and around Trunk Club.
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