Nordstrom beat a Wall Street estimate on earnings in the third quarter while falling short on revenue as the retailer winds down Canadian operations and deals with softer consumer spending.
Net earnings were $67 million, or 41 cents per diluted share, versus a loss of $20 million, or 13 cents per diluted share, in the year-before quarter, the company stated. Adjusted for one-time events, earnings per diluted share were 25 cents versus 20 cents for the year-previous period.
In the quarter, net sales were $3.2 billion and revenues were $3.32 billion versus $3.43 billion and $3.55 billion, respectively, in the period a year earlier, Nordstrom noted. Gross merchandise value decreased 7.1% year over year in the quarter.
A MarketBeat-published analyst consensus estimate called for earnings per adjusted diluted sales of 13 cents and revenues of $3.41 billion.
For the Nordstrom banner, net sales decreased by 9.4% and GMV decreased by 9.8% compared with the 2022 period, the company stated. The wind-down of Canadian operations had a negative impact on banner net sales of 410 basis points. The timing shift of the Nordstrom Anniversary Sale had a positive effect on banner revenues of 300 basis points versus the 2022 period, the company noted.
At the Nordstrom Rack banner, net sales slipped 1.8% compared with the 2022 quarter, the company indicated. The elimination of store fulfillment for Nordstrom Rack digital orders during the 2022 third quarter negatively impacted 2023 sales by approximately 100 basis points in the most recent third quarter. Nordstrom has announced plans to open 17 additional Rack stores, including seven in California.
Digital sales declined 11.3% in the quarter year over year. The elimination of store fulfillment for Nordstrom Rack digital orders during the 2022 third quarter negatively affected digital sales by 100 basis points in the most recent third quarter. The timing shift of the Anniversary Sale had a positive impact on company digital sales of 400 basis points compared with the 2022 third quarter. Digital sales represented 34% of total sales during the 2023 third quarter, Nordstrom maintained.
“In the third quarter we continued to make progress against our priorities, and we’re especially pleased with the resulting improvements in gross margin and earnings,” said Nordstrom CEO Erik Nordstrom. “Given continued uncertainty and softening consumer spend, we’re remaining agile and focused on serving our customers.”
Pete Nordstrom, the retailer’s president, said, “Thanks to solid execution by our merchants, we’re heading into holiday in a favorable inventory position across both banners. We have a strong and relevant assortment of brands and products we know our customers respond to.”
