• Q1 earnings drop 3.4% but beat expectations
  • Gross margin down 120 bps
  • Sales climb 6.8%

Upscale fashion retailer Nordstrom has reported first-quarter results that beat analyst expectations thanks to a comp store sales increase and tight expense management.

Earnings for the quarter ended 3 May, amounted to US$140m, or $0.72 per share, a drop of 3.4% on $145m a year earlier. The decline was due to technology investments and infrastructure costs related to the firm's upcoming entry into Canada.

Nonetheless, this was above Stifel analyst estimates of $0.04 per share.

Gross margin decreased 120 bps, in part due to increased markdowns in response to the heightened promotional environment.

Net sales, however, climbed 6.8% to $2.8bn, while comparable store sales increased 3.9%.

Stifel analyst Richard Jaffe said: "Nordstrom delivered a strong 1Q despite the challenging environment and inclement weather. More importantly, Nordstrom management reiterated their view of the future and its ongoing investments.

"Management has taken a long-term view, recognising that the retail world is changing rapidly and dramatically, and has adjusted its growth investments to be consistent with the changing environment."