Nordstrom shares ticked higher after the department store posted upbeat fourth quarter earnings and said sales ticked higher as consumers flocked to its discount Nordstrom Rack brand.

The Seattle-based company said total revenues rose 3 per cent to $4.3bn, broadly in line with analysts’ estimates. While sales at its full-line stores fell 1.1 per cent from a year ago, sales at the Nordstrom Rack brand climbed 10.7 per cent.

Overall, comparable sales at the company slid 0.9 per cent, worse than the expected 0.3 per cent gain. However, comparable sales rose 4.3 per cent at the Rack brand.

Nordstrom Rack has helped the company compete with discount retailers like TJX Cos that offer branded clothing at reduced prices. Indeed, the results showed that while the number of full-line US stores were unchanged at 118 at the end of fiscal 2017, compared with the year ago period, Nordstrom Rack stores climbed to 215, from 194.

Profits rose to $201m, or $1.15 a share, in line with Wall Street estimates, compared with $180m, or $1 a share, in the year-ago period. Adjusting for one-time items, earnings of $1.37 a share topped forecasts.

The company also noted that its gross margin improved by 112 basis points to 36 per cent and that its inventory declined 2.3 per cent.

Nordstrom’s upbeat results follow disappointing earnings from rivals like Macy’s and Kohl’s. The department store complex has been challenged by increasing competition from fast fashion retailers like H&M and Zara and ecommerce markets like Amazon.

The department store has also largely shrugged off criticism from US President Donald Trump, who said the company treated his daughter “so unfairly” after it dropped Ivanka Trump products from its stores and website — a move it attributed to the brand’s performance.

Looking ahead, the company said it expects net sales to rise between 3 to 4 per cent in fiscal 2017, ahead of the 2.4 per cent advance registered last year. Comparable sales are expected to be flat. It also projected full-year earnings in the range of $2.75 to $3 a share.

Nordstrom shares had dipped suddenly in the final hour of trade on Thursday along with other retailers and department stores, but were up 3.7 per cent in extended trading following results. Shares in the department store have declined more than 8 per cent so far this year

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