Nordstrom surges as inventory control system grows profits

Nordstrom, the luxury department store, reported upbeat earnings yesterday. Its third quarter profit rose as shoppers bought more and a new inventory control system allowed the company to keep tight control of its supplies.

Nordstrom successfully navigated the recession by offering a variety of merchandise and moving inventory at an incredibly fast clip – roughly 100 percent faster than both Macy's and Saks Inc., two of its competitors. Nordstrom's Q3 profit climbed 43 percent to $119 million – sales increased 11 percent as well. In a statement, Nordstrom asserted that its profits came from selling more items at full price because of its superior inventory monitoring system. The inventory system monitors trends among shoppers and specifically calculates the proper amount of merchandise to be displayed; its online inventory system allows shoppers to look at in-store supplies as well.

Nordstrom's earnings rise comes amidst an economic slowdown that has negatively affected other retail stores in the U.S. Chief financial officer, Michael Koppel, told investors that the company believes there "is still some uncertainty in the current economic environment and we do not anticipate any meaningful change in overall consumer spending over the near term."

Nordstrom effectively moved through the recession and looks to exceed analysts' expectations for full year growth. With the upcoming holiday shopping season about to kick off, the company hopes it can keep its momentum.