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CNBC ON DIGG

Nordstrom Earnings Miss Forecasts; Shares Take Hit

Published: Thursday, 12 Nov 2009 | 6:37 PM ET

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By: CNBC.com with Wires

Nordstrom reported earnings that missed analysts' expectations by a penny but beat on revenue, helped by better sales and higher merchandise margins, causing the company's shares to fall in after-hours trading.

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The high-end retailer also raised its fiscal 2009 guidance to between $1.83 a share and $1.88 a share, up from a previous range of $1.50 to $1.65. But analysts questioned whether it could meet the earnings numbers after it said it expects same-store sales to be down 6 to 7 percent for its fiscal 2009.

Nordstrom said it earned 38 cents a share excluding one-time items in the third quarter, compared with 33 cents a share this time last year.

Sales for the most recent quarter reached $1.87 billion, up from $1.805 billion in the same period last year.

Analysts who follow the company projected Nordstrom earning 39 cents a share on a topline of $1.784 billion.

Nordstrom said its best-performing categories at Nordstrom stores and online were jewelry, finer apparel for women and shoes.

"Although there is continued uncertainty around consumer spending, the company experienced an improving trend in same-store sales in each month of the quarter while effectively managing inventory and expenses," the company said in a statement.

Shares of the department store operator dropped about 4 percent in extended trading Thursday. Get after-hour quotes for Nordstrom

Nordstrom's mid-priced rivals Macy's [M Loading... () ] and Kohl's [KSS Loading... () ] have tried to dial down investor expectations about their holiday sales this week, forecasting earnings at the low end of Wall Street estimates.

"The shares' drop is a function of missing the estimates and a lack of confidence they can meet guidance for the holiday quarter," said Brian Sozzi, an analyst with Wall Street Strategies.

The unpredictable economy and questions surrounding where unemployment is headed have made company forecasts less reliable, Sozzi said.

Higher-end retailers have recently shown signs that affluent consumers may be starting to incease their discretionary spending, with Nordstrom and Saks [SKS Loading... () ] announcing last week that same-store sales gained in October.