Kohl's and Nordstrom beat forecasts, raise 2009 views

(Reuters) - Kohl's Corp (KSS.N) and Nordstrom Inc (JWN.N) beat quarterly profit estimates and raised their 2009 earnings views, defying a still precarious environment for department stores in which both well-to-do and budget shoppers are paring back.

Their results, helped by tighter expense controls and leaner inventories, presented investors with a speck of good news about a struggling industry that has endured months of dismal sales amid the recession.

But Kohl's raised forecast was still below Wall Street estimates and its shares closed the regular session down 1.7 percent and held steady in after-hours trading. Nordstrom shares, which gained over 3 percent in regular trading, added another 3 percent after hours.

Despite a 32 percent drop in quarterly net profit, upscale chain Nordstrom cited lower costs, lean inventory and credit card revenue, tempered by increasing bad debt expenses, for its brighter 2009 earnings outlook.

Profit margins improved at Kohl's, a mid-price department store, and the company cited gains in market share as sales rose a meager 0.4 percent.

That outshone Nordstrom's 9.2 percent fall in sales and sharp revenue drops at rivals, all of which have struggled to entice consumers to spend in the face of fear of job losses, home foreclosures and tight access to credit.

Analysts cautioned the retail sector remained in the doldrums.

"It tells us it's tough out there. You'd better be managing your inventory with an iron fist and owning your credit card business has significant risk, perhaps greater risk than people realize," said Stifel Nicolaus analyst Richard Jaffe, who has a "hold" rating on both companies.

Macy's Inc (M.N) posted a 9.5 percent drop in first-quarter sales on Wednesday and stuck to its forecast for sales to fall for the full year.

DISCOUNTERS OUTPERFORM?

When they do spend, consumers have sought deep discounts -- a trend likely to persist and help Kohl's, said Liz Dunn, a Thomas Weisel analyst.

"A more value-conscious consumer is likely to persist for some time, so Kohl's will continue to be well-positioned from that standpoint," Dunn said.

The world's largest retailer, Wal-Mart Stores Inc (WMT.N), whose low prices have attracted shoppers during the economic slump, posted a roughly flat quarterly profit.

Kohl's beat Wall Street estimates by a penny, according to Reuters Estimates. Net profit fell to $137 million, or 45 cents per share, from $153 million, or 49 cents per share, a year earlier.

Better controlled inventory led to less discounted merchandise in stores, the company said.

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U.S. trucker YRC to seek $1 billion in bailout funds

(Reuters) - YRC Worldwide Inc (YRCW.O) plans to apply for $1 billion in federal bailout money, the Wall Street Journal reported, citing the trucking company's chief executive William Zollars.

The company wants the funds to help cover the cost of its estimated $2 billion pension obligation over the next four years, the paper cited Zollars as saying.

About half of YRC's contributions to a multi-employer union pension fund cover the costs of retirees who never worked for the company, according to the paper.

Zollars told the paper that by applying to the U.S. Treasury for money under the Troubled Asset Relief Program, he hopes to "get the conversation started" with federal authorities about reducing the company's pension obligations.

YRC will submit an application to the Treasury as early as Friday, Zollars told the paper.

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