Nordstrom Inc (NYSE:JWN) Q3 2019 Earnings Conference Call - Final Transcript
Nov 21, 2019 • 04:45 pm ET
Greetings and welcome to the Nordstrom's Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. We'll begin with prepared remarks, followed by a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.
At this time, I'll turn the call over to Trina Schurman, Director of Investor Relations for Nordstrom. You may begin.
Good afternoon and thank you for joining us. Today's earnings call will last 45 minutes and will include 30 minutes for your questions. Before we begin, I want to mention that we'll be referring to slides, which can be viewed by going to the Investor Relations section on nordstrom.com. Our discussion may include forward-looking statements, so please refer to the slide showing our safe harbor language.
Participating in today's call are Erik Nordstrom, Co-President; and Anne Bramman, Chief Financial Officer, who will discuss the Company's third quarter performance and outlook for 2019. Joining during the Q&A session will be Pete Nordstrom, Co-President.
With that, I'll turn the call over to Erik.
Erik B. Nordstrom
Thank you for joining us today, we're pleased with our results. Our market strategy is transforming our business model and how we're serving customers. We have a unique mix of assets, Full-price, Off-Price, stores, and online and we are further linking our businesses to serve customers in new and differentiated ways. The success of our strategy in Los Angeles adds to our confidence as we expand to our top 10 markets. We recently achieved an important milestone with the opening of the New York City flagship store, significantly increasing our presence in the world's top retail market.
Turning to our third quarter results. Our earnings exceeded expectations, demonstrating substantial progress in the delivery of our strategy and strength of our operating discipline. Through our customer focus, we drove broad-based improvement and topline trends of more than 200 basis points relative to the first half of the year. In particular, the Off-Price business delivered positive sales growth and increased profitability through strong inventory and expense execution. We're encouraged by the momentum in our Full-Price and Off-Price businesses, as we execute our holiday strategy to establish Nordstrom, as a gifting destination for customers.
Through our focus on driving top and bottom line, we've made notable changes to two key events; our Anniversary Sale and Holiday. As we discussed previously, the priorities for Anniversary are to improve customer satisfaction, drive sales and increase the profitability. Customer feedback from this year's event was positive, significantly raising satisfaction scores. We curated the assortment by building more depth in key brands and items trending higher sell-throughs. As a result, we had fewer markdowns on Anniversary product in the third quarter, which contributed substantially to merchandise margins.
For the holidays, we're meaningfully expanding our gifting offer across Full-Price and Off-Price and making it easier for customers to find gifts by recipient and price point. We're also making shopping more convenient with services such as free next day shipping, 24/7 order pickup and complimentary gift wrapping. The