Better Nordstrom Sales May Signal Improving Economy

Nordstrom has raised its earnings outlook for this quarter, signalling a better than expected Christmas season. "We are not out of the woods yet," Blake Norstrom, president of the retail giant told the Wall Street Journal, "But we are encouraged that the trends are improving."

Nordstrom, which posted revenue gains in November from the year before, the second consecutive year-over-year gain, raised its earnings outlook for the full year.

Nordstrom's better-than-expected profits, are partly the result of an improving economy. But they also reflect a new approach at the retailer. By  offering a better mix of products, including more affordable lines, the retailer expects to avoid heavy markdowns. Better sales and lower selling, general and administrative expenses as a percentage of total sales are expected to result in a fourth quarter profit of 65 cents a share, more than double last year's profits.

Next year Nordstrom plans to open three new stores and relocate another in California.

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