Nordstrom Profits Fall Short Despite Increase In Sales

Nordstrom Reports Q1 Results and Future Outlook

Nordstrom, Seattle-based department store chain, has disclosed mixed first quarter results for 2024. Revenues for Q1 reached $3.22 billion, featuring a growth of 5.1% compared to $3.06 billion in the same quarter of the fiscal year 2023. Despite the momentous top-line growth, the company missed the profitability expectations.

The fashion retailer experienced a Q1 net loss of $39 million or 24 cents per share, an improvement from the loss of $205 million or $1.27 per share from the previous year. However, analysts had predicted a slimmer loss per share of 7 cents.

When dissected into business segments, the Nordstrom banner observed a scant 0.6 percent year-over-year increase in net sales, amounting to slightly above $2 billion. On the other hand, Nordstrom Rack observed a more substantial increase of 13.8 percent, totalling $1.18 billion in net sales for Q1.

Following the announcement of Q1 results, Nordstrom’s shares fell more than 6% in after-hours trading.

Despite the mixed results, Nordstrom’s CEO, Erik Nordstrom, remains optimistic. “The positive sales growth across the company in the first quarter was very encouraging,” he noted, expressing particular satisfaction with the progress of the company’s Rack banner. He admitted, “While we’re pleased with our top-line growth, profitability fell short of our expectations.” However, he added, “Looking ahead, our strong sales performance gives us momentum heading into the rest of the year and the confidence to reaffirm our 2024 guidance.”

Pete Nordstrom, acting president of Nordstrom Inc., painted a promising picture for the company’s future. He considers the company to be in a robust position regarding inventory health, both in managing levels and offering compelling content with good sell-through. “As we reflect on the legacy that our dad left behind, we’ve been reminded of his firmly held and consistent values — especially his commitment to serving our customers,” Pete Nordstrom said. “Those values have been integral to Nordstrom’s growth, and they remain at the core of the decisions we make as a company. We want to thank our teams for bringing our values to life as we stay focused on our priorities for 2024.”

Looking ahead, Nordstrom has reaffirmed its fiscal 2024 financial outlook. The company expects revenue, including retail sales and credit card revenues, to vary between a 2% decrease and a 1% increase, in comparison to the 53-week fiscal 2023. This expectation reflects a 135-basis-point adverse impact from the 53rd week included. Nordstrom predicted that earnings per share for the year will fall between $1.65 and $2.05.