Nordstrom May 2011 catalogue

May 12 - Nordstrom Inc forecast 2011 profit below analysts' view on charges related to its HauteLook acquisition, the first wrinkle in an otherwise smooth string of profit reports from department stores, which have been buoyed by consumers' willingness to spend.

The forecast from the upscale retailer came just hours after lower-priced chain Kohl's Corp -- which earlier on Thursday raised its full-year forecast -- said that exclusive merchandise such as an upcoming line of Jennifer Lopez clothing would help sales.

Nordstrom's new 2011 forecast calls for earnings of $2.80 to $2.95 per share, down from $2.95 to $3.10 per share previously.

The Seattle company said it expected the impact of purchase accounting charges related to its HauteLook acquisition to reduce 2011 earnings by about 20 cents per share, including a 4-cent hit from the first quarter. It added that some of the impact would be offset by first-quarter share repurchases.

Nordstrom executives said HauteLook, an online private sale marketplace, was performing ahead of company plans and that it should put up roughly break-even operating results for the year.

Nordstrom shares fell 1.9 percent in after-market trading, while Kohl's finished the day up 3.9 percent.

"While there may be some disappointment that we didn't get an outright guidance raise, it's important to note that management has typically been quite cautious in its guidance," said Walter Stackow, an analyst with Manning & Napier, which owns Nordstrom stock.

"That said, the announcement of a significant buyback is an indication of management's confidence and visibility over the near term," said Stackow, who added that he viewed the new 2011 earnings forecast as more of a "starting point".

How retailers will handle rising costs is one of the key questions for retailers in general, especially as higher food and gasoline costs eat into discretionary spending.

Kohl's and rival Macy's Inc said this week that initial tests in raising prices have been accepted by consumers.

When it comes to raising prices, Nordstrom "is particularly well positioned given their exposure to a higher income consumer that is less price conscious," Stackow said.

Well-heeled U.S. consumers spend a smaller percentage of their total income on basics like groceries and gas, and for months have been boosting results at companies ranging from coffee chain Starbucks Corp to organic and natural food seller Whole Foods Market Inc WFMI.O.

Shares in Nordstrom fell to $48.25 in after-hours trade from its close of $49.17. Kohl's closed at $55.68.

(Reporting by Lisa Baertlein and Brad Dorfman; editing by Gunna Dickson)