Nordstrom Inc (NYSE: JWN) reported better-than-expected sales for its fiscal third quarter on Tuesday. Shares, however, tanked more than 20% in after-hours trading as earnings fell shy of estimates. In the press release, CEO Erik Nordstrom said:
We have long benefited from a commitment to customer service, new and compelling merchandise, innovative brand partnerships and interconnected digital and physical assets. However, we need to move faster to capitalise on these strengths and profitably grow market share.
Q3 financial performance
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Nordstrom’s Q3 earnings printed at $64 million that translates to 39 cents per share. In the same quarter last year, its net income was capped at $53 million or 34 cents per share. The U.S. retailer noted an annualised growth of 18% in sales to $3.6 billion.
According to FactSet, experts had forecast 57 cents of EPS on $3.5 billion in sales. Compared to the 2019 equivalent, sales were still down about 1.0% in the recent quarter.
What else was noteworthy
Nordstrom’s sales in the third quarter saw a boost worth 200 basis points from its anniversary sale. CEO Erik Nordstrom also said:
Work is also underway to improve merchandise margin across the Company and ensure we have the visibility and flexibility we need to serve our customers seamlessly, despite global supply chain challenges.
The retailer’s namesake brand registered an 11% increase in net sales, while Nordstrom Rack was up 35% from last year. The American luxury department store chain noted a 12% annualised growth in digital sales and its ending inventory was up 13% from 2019.
For the full financial year, Nordstrom forecasts a minimum of 35% YoY growth in revenue. It expects EBIT margin to come in at 3.0% to 3.5% of sales.
The Washington-based company concluded the quarter with $867 million in available liquidity. Including the price action in extended trading, JWN is now in the red on a year-to-date basis.
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