Dive Brief:

• Nordstrom Thursday reported Q4 net sales grew 5.2%, overall sales grew 3.7%, and same-store sales grew 1.0% year over year, results that showed that the weak Q3 results from slowing store traffic have continued. 

• Fourth quarter revenues and earnings (in a quarter that includes the holiday season) missed expectations on Thursday, and the department store retailer lowered its full-year adjusted earnings per share (EPS).

• The company saw growth in web sales and at its off-price Nordstrom Rack locations. While net sales in flagship Nordstrom stores decreased 2.5% year-over-year, Q4 Rack net sales grew 6.9%. Nordstrom.com net sales increased 11%.

Dive Insight:

Nordstrom seemed to have shrugged off the troubles plaguing American department stores, but its last two quarters show that it may not be immune after all.

The discrepancy in the performance of its flagship stores and Rack stores indicate that the retailer may be seeing its off-price segments cannibalizing its full-price stores. Nordstrom’s inventory rose 12%, overwhelming its Q4 net sales growth of 5%.

The retailer said that its best-selling merchandise included beauty and shoes and that coats, denim, dresses, and brands aimed at younger people, like Topshop and Brandy Melville, fared well in women’s apparel.

Co-president Blake Nordstrom said in a statement that the company will be trimming costs to clear a path to profits.

“As we look ahead to 2016, we have always considered 2015 to be a peak investment year,” he said. “That hasn't changed. What has changed is the current environment that we are facing, which requires us to pivot even more as we remain focused on improving profitability. In response, we are making adjustments to reduce expense and capital spending in 2016 and in the coming years.” 

Some of those cuts include investments in its e-commerce operations, which bring in 20% of Nordstrom's sales, up from 8% five years ago. The company has grown this business in the past few years with investments in new distribution facilities, computerized systems, and prepping stores with further omnichannel capabilities. Nordstrom plans on keeping its tech and e-commerce spending the same this year as last, with a goal to "refine" its online assortment and make its fulfillment process more efficient. 

Away from the quarterly earnings stage, Nordstrom got some good news: A study of more than 5,700 consumers by market research firm Market Force found the retailer is the top destination for fashion, with the leading score of 58%.