As has been the case with other retailers, Nordstrom has recently faced some inventory issues, but it managed sales and earnings gains in the second quarter, giving Wall Street a little surprise along the way.
Net earnings were $126 million, or 77 cents per diluted share, versus $80 million, or 49 cents per diluted share, in the year-before quarter. Adjusted for one-time events, earnings per share were 81 cents versus 49 cents per share in the year-previous quarter, the company reported.
Nordstrom earnings per share topped a MarketBeat second-quarter analyst consensus estimate by a penny.
For the quarter, net sales increased 12% versus the same period in fiscal 2021 to $3.99 billion, exceeding pre-pandemic sales levels, while net revenues increased to $4.1 billion from $3.66 billion in the year-prior period. Gross merchandise value gained 12% in the quarter year over year as well. Anniversary Sale timing, with one day shifting from the third quarter to the second quarter, had a positive impact of about 200 basis points on net sales versus the 2021 period.
Among merchandise categories, men’s apparel had the strongest growth in the quarter versus 2021, and shoes, women’s apparel and beauty also enjoyed double-digit increases, as customers updated their wardrobes and returned to occasions. Total anniversary event sales advanced 5%, including one day of the event that fell in the third quarter.
For the Nordstrom banner, net sales increased to $277 billion from $2.42 billion in the 2021 quarter as GMV gained 14.9%. The timing shift of the Anniversary Sale had a positive impact on Nordstrom banner net sales of about 400 basis points versus the 2021 period.
For the Nordstrom Rack banner, net sales increased to $1.22 billion from $1.15 billion in the 2021 quarter. Digital sales advanced 6.3% versus the year-earlier period. The timing shift of the Anniversary Sale had a positive impact on company digital sales of about 400 basis points versus the 2021 quarter. Digital sales represented 38% of total sales in the period, according to Nordstrom.
“We delivered solid results in the second quarter, with topline growth, increased profitability and continued progress in our strategic initiatives,” said Erik Nordstrom, Nordstrom CEO, in announcing the financials. “While our quarterly results were consistent with our previous outlook, customer traffic and demand decelerated significantly beginning in late June, predominantly at Nordstrom Rack. We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses to recent trends, and we remain confident in our ability to deliver on our long-term strategic and financial goals.”
Pete Nordstrom, the company’s president and chief brand officer, said, “We elevated the customer experience and increased engagement during this year’s Anniversary Sale, and we’re proud of our team’s execution and dedication to customers. As we look to the second half of the year, we are aggressively right-sizing our inventory while investing in supply chain and merchandising capabilities that will benefit us in 2023 and beyond.”
