Nordstrom performed better in its first quarter than Wall Street expected despite lower sales at full-line department stores and its off-price Rack operation.
An analyst consensus estimate published by MarketBeat called for a loss per adjusted diluted share of 12 cents and revenues of $3.11 billion.
Total revenues, including credit card contribution, was $3.18 billion versus $3.57 in the year-previous period.
Net sales slid 11.6% to $3.06 billion versus the year-earlier quarter including a 175 basis point negative impact from the wind-down of Canadian operations, the company stated. Nordstrom banner net sales fell 11.4% while net sales for Nordstrom Rack decreased 11.9% in the period year over year.
Digital sales decreased 17.4% versus the year-before quarter. The elimination of store fulfillment for Nordstrom Rack digital orders during the 2022 third quarter and sunsetting Trunk Club earlier in fiscal 2022 negatively impacted first-quarter digital sales by about 800 basis points, Nordstrom asserted. Digital sales were 36% of total sales in the quarter.
The company maintained that it had made progress on key priorities in the first quarter, with Nordstrom Rack as a particular focal point. The strongest Rack performance came in April, primarily driven by increased merchandise mix penetration of strategic brands.
Performance in most categories across the U.S. store base softened in the quarter year over year, which benefited from a return to occasions after the pandemic. Active was the strongest Nordstrom sales category in the period, with beauty and men’s apparel performing above average, the company indicated.
In announcing the first quarter results, Erik Nordstrom, company CEO said, “We are pleased with the progress we’re making against the key priorities we laid out for 2023 as we continue to enhance our overall customer experience, improve Nordstrom Rack performance, increase inventory productivity and optimize our supply chain operations. We’re encouraged by our momentum, especially given the uncertain macroeconomic environment. We remain focused on executing with agility and delivering long-term value to our shareholders.”
Pete Nordstrom, Nordstrom president and chief brand officer, added that the focus on key priorities “allows us to better serve our customers through great brands at great prices at the Rack and more product newness and better flow across our banners, while also positioning us for more profitable growth. We’re grateful to our team for their hard work and focus, and we’re excited to serve our customers with new and fresh selections from the best brands at our upcoming Anniversary Sale.”
