Nordstrom (JWN) Announces First Quarter 2022 Losses

Nordstrom reported fiscal first-quarter sales ahead of analysts’ expectations on Tuesday and raised its full-year outlook, citing company momentum as shoppers visited the company’s department stores to freshen up their closets. with brands and designer shoes.

Nordstrom now sees revenue for fiscal 2022, including credit card sales, increase 6% to 8%, from a previous range of 5% to 7%.

It forecast earnings per share, excluding the impact of any buyback activity, in the range of $3.38 to $3.68, up from a previous range of $3.15 to $3.50. . On an adjusted basis, he expects to earn between $3.20 and $3.50 per share.

Its shares jumped about 9% in after-hours trading on the news.

The optimistic outlook contrasts with retailers like Target, Kohl’s, Abercrombie & Fitch and a host of others which in recent days have revised their annual forecasts as supply chain costs and other expenses eat away at profits. . But Nordstrom’s business hasn’t worked in tandem with these other retailers either.

Last fall, for example, when many retailers saw sales rebound above pre-pandemic levels, Nordstrom was still working to do so. Now, while retailers such as Macy’s lap have tougher year-over-year comparisons, Nordstrom is riding on a lower base.

Chief executive Erik Nordstrom said the company has been able to capitalize on demand from people shopping for “long-awaited occasions” as pandemic restrictions ease and invitations resume for weddings, parties. meetings and other social gatherings.

Still, the retailer posted a slightly larger adjusted loss per share than analysts were looking for.

Here’s how Nordstrom fared in its first fiscal quarter compared to what Wall Street was anticipating, based on a Refinitiv survey:

  • Loss per share: 6 cents adjusted vs. 5 cents expected
  • Revenue: $3.57 billion vs $3.28 billion expected

Nordstrom reported net income for the three months ended April 30 of $20 million, or 13 cents per share, compared with a net loss of $166 million, or $1.05 per share, a year earlier .

Nordstrom lost 6 cents per share on an adjusted basis, excluding a gain from the sale of the company’s stake in an office building and an impairment charge related to a Trunk Club property. That per-share loss was a penny larger than analysts were looking for.

Nordstrom announced on Tuesday that it plans to end its Trunk Club business, a personal style platform — somewhat similar to Stitch Fix — which it acquired in 2014. The company said it would instead focus its resources on her own styling services available from Nordstrom.

Total revenue, including credit card sales, reached $3.57 billion, up from $3 billion a year earlier. This exceeded expectations by $3.28 billion.

At Nordstrom’s eponymous banner, net sales rose 23.5%, surpassing pre-pandemic levels. Nordstrom Rack net sales increased 10.3% but were still below 2019 levels, the company said.

Nordstrom Rack, which competes with low-cost chains such as TJX, Ross Stores and Macy’s Backstage, has had a harder time during the pandemic getting merchandise from other retail brands, which it can then sell at a discount. reduced. In April, Nordstrom announced plans to streamline ownership of the Rack business by bringing in a group of executives with prior off-price retail experience.

“By increasing our offering of premium brands and refining our assortment to better align with customer needs, we are achieving a better price balance at The Rack,” Nordstrom management said in prepared remarks.

Digital sales were flat year over year as shoppers cut back on online spending and returned to stores. E-commerce represented 39% of total sales, compared to 46% a year earlier.

Nordstrom said its urban stores, including its flagship New York location, performed best in the quarter as workers returned to their offices in nearby office buildings and tourist traffic picked up. Collectively, city store sales have returned to pre-pandemic levels, the company said.

Chief Financial Officer Anne Bramman said the company so far has not seen inflationary cost pressures translate into lower customer spending. On a post-earnings conference call, she said this was due to the “higher income profile and resilience” of her clients.

Nordstrom ended the three-month period with inventory levels up 23.7% from a year earlier, in part because the company ordered additional merchandise to build inventory ahead of its next annual sale. birthday.

Also on Tuesday, Nordstrom announced it would soon begin selling shoes from Allbirds, making it one of the sustainable sneaker brand’s few third-party retail partners, and said it had authorized a new $500 million buyout.

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