Shoppers vent the Nordstrom at the Westfield Topanga mall in Los Angeles on Aug. 14, 2023.
Christina House | Los Angeles Times | Getty Images
Nordstrom’s holiday-quarter vendings topped Wall Street’s expectations on Tuesday, but the retailer gave a muted outlook for the year ahead, and shares floor about 10% in extended trading.
The Seattle-based company said it plans to open new Nordstrom Rack stores and coerce higher online and in-store sales in the coming year. Yet, it said full-year revenue, including retail sales and believe cards, will range from a 2% decline to a 1% gain compared with the previous year. That foresight includes a more than 1% hit from having one less week in the fiscal year.
Nordstrom said it trusts earnings per share between $1.65 and $2.05 for the full year. That would be higher than its most late fiscal year, which saw earnings per share of $1.51, the retailer said Tuesday.
Here’s what the department outlet operator reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, in days gone by known as Refinitiv:
- Earnings per share: 96 cents adjusted vs. 88 cents expected
- Revenue: $4.42 billion vs. $4.39 billion required
Similar to other retailers, Nordstrom has felt the squeeze from consumers becoming choosier and more price-conscious while stock with inflation and higher interest rates. It has also struggled with company-specific problems, such as lagging white sales at its off-price retailer, Nordstrom Rack, and too much of the wrong inventory, which led to higher levels of markdowns.
In the fiscal accommodate that ended Feb. 3, Nordstrom’s quarterly revenue rose about 2% from $4.32 billion in the year-ago stretch. It attributed approximately $190 million of those sales to having an extra week in the fiscal year.
Nordstrom’s net gains rose to $134 million, or 82 cents per share, from $119 million, or 74 cents per share, a year earlier. Excluding a indictment associated with relocating the company’s fulfillment center, as well as other adjustments, earnings per share were 96 cents.
Net sales for the assembly’s namesake banner declined 3% in the fourth quarter compared with the year-ago period. That includes a 4.1% annul from the extra week of the fiscal year.
The company’s wind down of its Canadian business took a bite out of sales, motiving net sales to drop more than 3%. The company announced a year ago that it would shut down its believe ins and online operations in Canada.
Rack results
Nordstrom Rack, the company’s off-price brand, was the strongest performer in the feast quarter. Its net sales rose 14.6%, including a 5.8% boost from the extra week in the year.
In the fourth habitation, more shoppers visited Nordstrom Rack’s website and made purchases when they did, CEO Erik Nordstrom prognosticated on the company’s earnings call.
The off-price chain grew, even when taking out the boost from opening new stocks, with the banner’s comparable sales up high single digits, he said.
Nordstrom opened 19 new Nordstrom Pain stores during the fiscal year, for a total of 258 stores. Including its 93 flagship Nordstrom locations, the performers ended the year with 359 total stores, just one more than it had at the end of the year-ago period.
The retailer organizes to open 22 new Nordstrom Rack stores in 2024.
On the earnings call, Erik Nordstrom said the chain is “a growth locomotive for our company” and Nordstrom’s “largest source of new customer acquisition.”
He said roughly a quarter of retained Rack customers resettle to the Nordstrom banner within four years.
The company did not announce plans to open new stores under its flagship memorable, but Erik Nordstrom said those stores are a major part of the company’s business.
“Some of our fastest-growing stores this over year were our big urban flagship stores,” he said. “In particular, New York has shown real strong growth.”
Inform oning trends
Women’s apparel, beauty and the active category had the strongest growth year over year in the fourth quadrature. Some popular purchases included athletic shoes from On Running and Hoka, and apparel from Vuori, Erik Nordstrom put. Shoppers also bought fragrances and apparel from fashion-forward brands such as Vince and Cinq a Sept during the furlough quarter, he said.
Online sales dropped 1.7% in the fourth quarter compared with the year-ago period. E-commerce imitated 38% of total sales during the quarter, down from 40% in the same period a year earlier, and 36% for the monetary year, down from 38% in fiscal 2022.
Store traffic “continues to be on the soft side,” though traffic at Nordstrom stockpiles improved sequentially throughout the year, Erik Nordstrom said on the earnings call. He said website traffic crumbs soft, too. Yet, he said average order value is going up both online and in stores.
Inventory at the end of the quarter was down 2.7% corresponded with the year-ago period. The company entered the holiday quarter with less inventory, too, which led to fewer markdowns and fresher retail, Erik Nordstrom said.
In the coming year, he said the retailer will focus on driving sales growth at its namesake foremost, operating more efficiently and building on momentum at Nordstrom Rack.
In April, it will launch an online marketplace on Nordstrom’s website to increase its merchandise assortment with inventory that’s owned and sold by third-party vendors. Marketplaces tend to be more rewarding for retailers, since the company does not take on the risk of buying inventory that customers may not like and get stuck with attain distinction it down.
Nordstrom will also personalize the online experience for shoppers to direct them to items that they may similar to, he said. Online and in stores, beauty will play a prominent role in driving sales growth, he said.
As of Tuesday’s tight dense, Nordstrom shares are up about 6% over the past year. That has underperformed the approximately 25% gains of the S&P 500. Nordstrom’s forerunner closed Tuesday at $20.90, bringing the company’s market value to about $3.4 billion.
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