• Nordstrom beat Wall Street's revenue expectations and delivered a slightly rosier full-year sales outlook.
• The retailer's sales growth is notable at a time when discretionary merchandise and the luxury sector have been under pressure.
• Clothing and shoe purchases lifted the company's performance, with sales of women's apparel and activewear jumping by double digits year over year.

Nordstrom on Tuesday beat Wall Street's quarterly sales expectations, as revenue grew about 4% year over year from shoppers buying clothing, shoes and activewear at both the company's namesake department store and its off-price chain.

Yet despite its better-than-expected quarter, the Seattle-based retailer gave only a slightly rosier full-year sales forecast — taking a conservative stance as it gears up for the busiest weeks of the holiday season. The company said it now expects full-year revenue, which includes retail sales and credit card revenue, to range from flat to up 1% for the full year. That compares to its previous range of a 1% decline to 1% growth. However, it stuck by its adjusted earnings outlook for the year of between $1.75 and $2.05 per share. 

In a news release, CEO Erik Nordstorm said the company's results show efforts to appeal to selective shoppers are paying off. Sales of women's apparel and activewear shot up by double digits year over year. Shoes, men's apparel and kids grew by mid-to-high single digits year over year. 

Compared with the second quarter, women's apparel, shoes and men's apparel sales in the fiscal third quarter also grew sequentially.

"Our customers have a lot of choices, and our results give us encouragement that we're on the right path," he said. "Looking ahead, we'll continue to improve our shopping experience as we strive to maintain the positive momentum we've worked towards all year."

On the company's earnings call, however, he said Nordstrom saw "a noticeable decline in sales trends towards the end of October." It factored that slowdown into its holiday expectations, he said.

Here is how Nordstrom did in the three-month period that ended Nov. 2 compared to what Wall Street anticipated, based on a survey of analysts by LSEG:

• Earnings per share: 33 cents adjusted, it was not immediately clear if it was comparable with analysts' estimates
• Revenue: $3.46 billion vs. $3.35 billion expected

Nordstrom's net income for the fiscal third quarter was $46 million, or 27 cents per share, compared with $67 million, or 41 cents per share, in the year-ago period. Revenue rose from $3.32 billion in the year-ago quarter.

After excluding a charge related to accelerated depreciation of technology, Nordstrom reported adjusted earnings per share of 33 cents.

Comparable sales increased 4% across Nordstrom's two brands, its namesake and its off-price chain, Nordstrom Rack. That easily topped analysts' expectations for 0.7% gains in comparable sales, according to StreetAccount.

Nordstrom's sales growth, while modest, is notable at a time when sales of discretionary merchandise and the luxury category have been under pressure. Retailers including Walmart, Best Buy and Target have reported over the past week that customers remain choosy when it comes to buying items that are wants, not needs, and have paid more attention to price. 

Nordstrom's sales growth also grew, despite a calendar shift with its Anniversary Sale. In the year-ago quarter, eight days of the sale fell into the three-month period, but only one day fell in the quarter this year. That had a negative impact on net sales of about 1%.

Macy's, which postponed its full earnings, said third-quarter sales fell 2.4% and comparable sales for its owned and licensed businesses plus online marketplace dropped 1.3%,

Nordstrom has leaned on its off-price chain, Nordstrom Rack, to drive both sales growth and new store locations. Yet in the third quarter, the two banners reported similar comparable sales – with the namesake store's up 4% and Nordstrom Rack up 3.9%.

So far this year, Nordstrom has opened 23 new Nordstrom Rack stores, which lines up with the company's plans to open 20 to 25 new Racks per year.

At the end of the quarter, the company launched store fulfillment for online orders at Nordstrom Rack in over 100 stores across the country, CEO Erik Nordstrom said on the company's earnings call. He said the company also launched a new feature which allows customers to buy online and pickup in store, at the same stores.

Digital sales rose 6.4% year over year and in the quarter, e-commerce accounted for about a third of total sales.

Erik Nordstrom said the company added better search and discovery features to its website and app, which supported online growth in the quarter. He said it also added more items that are under $100 in price and expanded its third-party marketplace business, which now has over 300 sellers.

Nordstrom's latest quarterly update comes about two months after Nordstrom's founding family made a fresh bid to take the company private. According to a filing in September, CEO Erik Nordstrom, President Peter Nordstrom and Mexican retailer El Puerto de Liverpool sent a non-binding letter to form an entity that would buy the chain for $23 per share. 

Shares of the company have shot up since a Reuters report in March that Nordstrom's founding family wanted to take the company private. As of Tuesday's close, the company's stock has risen 32% so far this year, outpacing the S&P 500's 26% gains.