A sign marks the location of a Nordstrom store in a shopping mall on March 20, 2024 in Chicago, Illinois.
Scott Olson | Getty Images
Nordstrom on Tuesday delivered a slightly rosier sales forecast, after revenue grew about 4% year over year as shoppers bought clothing, shoes and activewear at both the company’s namesake department store and its off-price chain.
The Seattle-based retailer 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.”
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%.
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.
This is breaking news. Please check back for updates.