Dive Brief:

• Nordstrom this week became the latest department store retailer fighting off the blues, announcing second quarter same-store sales and earnings that beat analyst forecasts while reporting revenue that barely missed expectations.

• Nordstrom's Q2 same-store sales fell 1.2%, handily beating a Retail Metrics consensus estimate of a 3.3% decrease. Quarterly earnings of 67 cents per share signaled another easy beat of Retail Metrics' estimate of 56 cents per share, but were down from 93 cents a year ago. Q2 revenue was $3.65 billion, barely missing analysts’ expectations of $3.68 billion.

• The off-price Nordstrom Rack unit, which includes Rack stores, the Rack website and flash-sales site HauteLook, was even more impressive, logging an 11.2% net sales increase and same-store sales growth of 5.3%.

Dive Insight:

Nordstrom’s stock was already enjoying the benefits of investor perception of a department store rally, rising 7% during the day and closing up another 11% after its quarterly earnings report hit newswires.

Like discount department store Kohl’s, Nordstrom executives said they had worked through inventories to bring them in line with sales. And like Macy’s, Nordstrom said its annual mid-summer anniversary sale event was particularly successful, in Nordstrom’s case besting its own expectations and setting a record for sales volume. The event could continue to yield benefits: Because it ran a week later in July compared to the year before, the sale spilled into the current quarter, and could have a similarly positive impact on the retailer's Q3 earnings report.

Retail Metrics president Ken Perkins agrees that evidence of improved sales at both Nordstrom and Macy’s “sets an encouraging tone heading into 3Q16.” But he also took note of Nordstrom’s operating income decline.

“Nordstrom made sequential progress in terms of its operating income decline relative to Q1, when it plummeted 51% YOY [year over year],” he wrote in a note to clients. “The luxury department store chain pared that decline back to 35% YOY in Q2, but has still generated seven consecutive quarters of YOY operating income declines.”

Nordstrom raised its forecast for its fiscal year 2016 to earnings of between $2.60 and $2.75 per share, up slightly from its prior forecast for between $2.50 and $2.70 per share, and said sales would likely increase 2.5% to 4.5%.

Nordstrom also noted that its overhauled loyalty program is paying dividends. In late May, the retailer expanded the Nordstrom Rewards effort beyond store credit card holders: Since that time, about 1.5 million customers have signed up, boosting the program to about 6 million members in all.

Speaking Thursday afternoon on Nordstrom's quarterly analyst call, co-president Erik Nordstrom said signing up rewards program members enables the retailer to deliver a more personalized experience. "That, long term, is what we’re particularly excited about,” Nordstrom said, according to the Seattle Times.