Shoppers leave Nordstrom at the Westfield Topanga shopping center on August 14, 2023.
Cristina House | Los Angeles Times | fake images
Nordstrom's Holiday quarter sales beat Wall Street expectations on Tuesday, but the retailer offered a dovish outlook for next year.
The Seattle-based company said it plans to open new Nordstrom Rack stores and drive higher sales online and in stores over the next year. However, it said full-year revenue, including retail sales and credit cards, will range between a 2% decline and a 1% increase compared to the previous year. That forecast includes a more than 1% impact from having one less week in the fiscal year.
Nordstrom said it expects earnings per share of between $1.65 and $2.05 for the full year. That would be higher than its most recent fiscal year, which saw per-share earnings of $1.51, the retailer said Tuesday.
Nordstrom shares fell about 10% in extended trading following the report.
Here's what the department store operator reported compared to what Wall Street expected, according to a survey of analysts by LSEG, formerly known as Refinitiv:
- Adjusted earnings per share: 96 cents vs. 88 cents expected
- Revenue: $4.42 billion vs. $4.39 billion expected
Like other retailers, Nordstrom has felt pressure for consumers to become more selective and price conscious as they face inflation and higher interest rates. It has also struggled with company-specific issues, such as lagging sales at its off-price retailer, Nordstrom Rack, and too much incorrect inventory, which led to higher levels of markdowns.
In the fiscal quarter that ended Feb. 3, Nordstrom's quarterly revenue rose about 2% from $4.32 billion in the same period a year earlier. It attributed approximately $190 million of those sales to having an extra week in the fiscal year.
Nordstrom's net income rose to $134 million, or 82 cents per share, from $119 million, or 74 cents per share, a year earlier. Excluding a supply chain impairment charge and other adjustments, earnings per share were 96 cents.
Net sales of the company's eponymous brand decreased 3% in the fourth quarter compared to the same period a year ago. That includes a 4.1% increase over the additional week of the fiscal year. However, the company's closure of its Canadian business affected sales, causing net sales to fall more than 3%. The company announced a year ago that it would close its stores and online operations in Canada.
Nordstrom Rack, the company's discount brand, had the best performance in the holiday quarter. Its net sales increased 14.6%, including a 5.8% increase due to the extra week of the year.
In the fourth quarter, women's apparel, beauty and active categories had the largest year-over-year growth.
Online sales fell 1.7% in the fourth quarter compared to the same period a year earlier. E-commerce accounted for 38% of total sales during the quarter, up from 40% in the same period last year, and 36% for the fiscal year, up from 38% in fiscal 2022.
As of Tuesday's close, Nordstrom shares were up about 6% over the past year. That has underperformed earnings by about 25% of the S&P 500. Nordstrom shares closed Tuesday at $20.90, bringing the company's market value to about $3.4 billion.
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