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Best Buy, Tiffany, and Nordstrom: How These Three Companies Are Surviving Amazon


Here's how they're doing it, based on their own quarterly reports and comments in earnings calls.

What do the three retailers Best Buy (NYSE:BBY), Tiffany & Co. (NYSE:TIF), and Nordstrom Inc. (NYSE:JWN) have in common?
Not much. Except that the electronics chain, the legendary jewelry emporium, and the upscale fashion store all have found ways to survive Amazon (NASDAQ:AMZN) and all of the other e-tailers, and that's no small feat. They proved it last week, with quarterly earnings reports that pleased Wall Street while offering some insights into how they're adjusting to the times.
As for the rest, most of them just came up with excuses for failing to meet expectations for the quarter. Dick's Sporting Goods Inc. (NYSE:DKS) cited weak demand for golf and hunting gear as it sharply cut its outlooks for same-store sales and profits. Urban Outfitters (NASDAQ:URBN) blamed higher expenses. Macy's Inc. (NYSE:M) complained about the weather. Staples (NASDAQ:SPLS) just said store traffic was weak (well, yes, that would certainly hurt profits). The list goes on, but as it piled up, retail analysts belatedly slashed their overall projections for the retail sector's performance in the current quarter, to 10.8% growth, from 16%.
No complaints, though, from the first three I mentioned. Here's how they did it, based on their own quarterly reports and their comments in earnings calls after the reports were released.
Tiffany's for the Rest of Us

The fabled New York City jeweler has grown into a public company with stores in malls, but it's still no Cinnabon. It has fewer than 300 stores worldwide, and they set up shop only in the most upscale locations available.
Still, the company's recent success, online and in the real world, is due mostly to a new, lower-priced line called Atlas. These simple, modern designs in silver or gold aren't studded with gems, but they're not cheesy, either.
For its last quarter, Tiffany reported earnings of $126 million, or $0.97 a share, compared to $84 million, or $0.65 a share, in the same quarter a year earlier. The company also raised its quarterly dividend by 12%, to $0.38 a share.
Nordstrom Throws a Flash Sale

Nordstrom made its name with excellent customer service, creating a good shopping experience for an upscale (but not oil-baron upscale) customer. In its latest quarter, its mall stores continued to see declining sales, but they were offset by stronger traffic at Nordstrom Rack, its discount offshoot. Now the company is working on taking Nordstrom Rack online, complete with flash sales and fast shipping.
Nordstrom reported first-quarter profits of $0.72 a share. Quarterly revenue rose 7%, to $2.9 billion.
Best Buy Reuses Real Estate

Best Buy has found a new use for all that space it maintains in 1,400 store locations nationwide. It's now using its stores as distribution hubs for the merchandise it sells online.
The new system allows it to process and ship orders as fast as Amazon. That, and a "low price guarantee," is bringing customers back. "We continue to leverage our ship-from-store digital marketing and enhanced site functionality," said Chief Executive Hubert Joly on the company's earnings conference call last week.
The company has seen a number of real benefits from the new system, from lower delivery costs to better margins on sale items and faster clearance of products replaced by updated models.
The company is still thinking up ways to turn its physical presence into benefits for customers. Internet buyers can now pick up purchases at a store. Soon, customers will be able to return Internet purchases there, too.
For the last quarter, Best Buy reported earnings of $0.33 a share on sales of $9.04 billion.
Overall, the company's sales are still falling. But investors seemed to accept its excuse: that the "next big thing" in consumer electronics -- whatever it is -- just hasn't arrived yet.

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