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Nordstrom e-commerce sales jump 24% in Q2

August 14, 2015 02:45 PM
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E-commerce accounts for a growing share of the bottom line for retail chain Nordstrom Inc., and the company says it will focus its attention on improving its mobile presence to grow revenue.

In its Q2 2015 earnings filing, Nordstrom, No. 19 in the Internet Retailer 2015 Top 500 Guide, reported overall e-commerce sales of $742 million, up 24.3% from $597 million during the same period last year. The $742 million represents 20.6% of Nordstrom’s total net revenue of $3.598 billion. That’s a greater share than in Q2 2014, when e-commerce accounted for 18.1% of overall revenue.

Co-president Blake Nordstrom told analysts on the retailer’s earnings call that he and his team consider mobile fertile ground for revenue growth, with more than 90% of the retailer’s customers using mobile devices. In May, Nordstrom rolled out a text-to-buy program called TextStyle, which lets customers buy a product they like simply by sending a text message after opting in to the Nordstrom Next texting service.

“As customers continue to want a more integrated shopping experience, we view mobile as a long-term priority to provide a richer experience for our customers,” Blake Nordstrom told analysts on the call, according to a transcript from Seeking Alpha. “To evolve with our customers' rapidly changing expectations, we're rolling out new features at a rate three times faster than last year.”

The retailer unveiled several enhancements to its mobile platform during Q2 2015. including near-store notification, which allows Nordstrom to send notifications to customers who have downloaded its app when they’re close to a store. It also unveiled a personalized home page on mobile.

Executive vice president Jamie Nordstrom says ongoing improvements are part of a channel-agnostic approach that centers on the fact that many shoppers are always connected to the Internet, regardless of where they are physically.

“The sale can happen all over the place,” he told analysts. “They might be shopping in a store and buying on their phone. The customer doesn't care where the sale gets recorded. They just want the best stuff and they want to have the best experience on their terms. The more we're focused on that and less on the channel, I think the better our business will be.”

The company’s fulfillment center in Elizabethtown, Pa., is set to open in the third quarter. The Elizabethtown facility is Nordstrom’s third fulfillment center and will expand its fulfillment capacity by more than 50%.

For the second quarter ended Aug. 1, Nordstrom reported:

  • Sales through its flagship site, Nordstrom.com, of $625 million, up 20.4% from $519 million during the same period last year.
  • Sales through NordstromRack.com and HauteLook combined for $117 million, up 50% year over year from $78 million.
  • Net revenue of $3.598 billion, up 9.2% from $3.296 billion during the same period last year.
  • Gross profit of $1.272 billion, up 9.0% from $1.167 billion during the same period last year.
  • Comparable sales, which include e-commerce and physical retail locations, up 4.8% year over year.

For the first six months of fiscal 2015, Nordstrom reported:

  • E-commerce now accounts for 19.9% of Nordstrom’s total revenues, compared to 17.5% through the first half of last year.
  • Sales through Nordstrom.com of $1.105 billion, up 20.1% from $920 million during the same time last year.
  • Sales through NordstromRack.com and HauteLook of $234 million, up 51.0% from $155 million during the same time last year.
  • Net revenue of $6.714 billion, up 9.5% from $6.133 billion during the same time last year.
  • Gross profit of $2.391 billion, up 9.5% from $2.184 billion during the same time last year.
 

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