Nordstrom is investing over $3 billion over the upcoming years to make upgrades that include technology enhancements. The furor over the decision by the retailer to drop the line of Ivanka Trump collection and the unhappy response by the president did not seem to have a negative impact on its bottom line.
This past week, during its earnings call, an analyst asked if the response by President Trump had helped or hurt the company.
Peter Nordstrom, the merchandising president at Nordstrom, said it was negligible and was not discernible either way.
Early this February news broke that Nordstrom would be dropping Ivanka Trump’s clothing and accessory line explain that it was only a business decision and not one that involved politics.
A report this week found that the sales of apparel and footwear lines under the Ivanka Trump line fell 32% during the full just ended fiscal year, with drops increasing upon the approach of the presidential elections in November.
President Trump expressed his unhappiness with Nordstrom in the form of tweets calling it, “Terrible.”
Shares Nordstrom took an initial drop after the tweet by Trump, but quickly recovered in only four minutes.
Nordstrom posted adjusted per share earnings for the fourth quarter of $1.37 which beat analyst estimates of $1.15. Sales ended at $4.32 billion which was just below estimates by analysts of $4.35 billion. Sales in same-stores were down just 0.9%.
On Friday, shares at Nordstrom ended the day 5.7% higher. The retailer ended its fiscal year as a business with two distinct parts: its mainstream business that is struggling trying to find growth; and its off-price business that overall has been doing very well.
The off-price retailer, Nordstrom Rack had sales at same-stores that were 4.3% for the just ended quarter.
Analysts attribute the issues in its mainstream business to challenges facing the majority of retailing such as declining traffic in malls to the desire by consumers for more discounts and the online e-commerce sector eating away at brick and mortar sales.
The e-commerce business for the mainstream part of Nordstrom has performed well but much of its growth was from existing clients who because of shopping online, go to their stores less.
That in turn has made it a victim if its own successful sales and must find new ways of making better connections between its different channels or of convincing online clients to also shop more frequently ad buy more.