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Nordstrom (JWN) reports Q1 2022 losses

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Nordstrom on Tuesday reported fiscal first-quarter sales ahead of analysts’ expectations and hiked its full-year outlook, citing momentum within the business as shoppers visited the corporate’s shops to refresh their closets with designer brands and shoes.

Nordstrom now sees fiscal 2022 revenue, including bank card sales, up 6% to eight%, compared with a previous range of up 5% to 7%.

It forecasts earnings per share, excluding the impact of any share repurchase activity, in a spread of $3.38 to $3.68, up from a previous range of $3.15 to $3.50. On an adjusted basis, it expects to earn between $3.20 and $3.50 a share.

Its shares jumped about 9% in after-hours trading on the news.

The optimistic outlook stands in contrast to retailers like Goal, Kohl’s, Abercrombie & Fitch and a slew of others that in recent days dialed back their annual forecasts as supply chain costs and other expenses eat into profits. But Nordstrom’s business also hasn’t been operating in tandem with those other retailers.

Last fall, for instance, as many retailers saw their sales rebound to above pre-pandemic levels, Nordstrom was still working to achieve this. Now, as retailers resembling Macy’s lap harder year-over-year comparisons, Nordstrom is constructing off of a lower base.

Chief Executive Officer Erik Nordstrom said the corporate has been in a position to capitalize on demand from people who find themselves looking for “long-awaited occasions” as pandemic restrictions dissipate and invitations resume for weddings, reunions and other social gatherings.

Still, the retailer booked an adjusted per-share loss that was barely wider than what analysts had been in search of.

Here’s how Nordstrom did in its fiscal first quarter compared with what Wall Street was anticipating, based on a Refinitiv survey:

  • Loss per share: 6 cents adjusted vs. 5 cents expected
  • Revenue: $3.57 billion vs. $3.28 billion expected

Nordstrom reported net income for the three-month period ended April 30 of $20 million, or 13 cents a share, compared with a net lack of $166 million, or $1.05 per share, a 12 months earlier.

Nordstrom lost 6 cents a share on an adjusted basis, excluding a gain resulting from the sale of the corporate’s interest in a company office constructing and an impairment charge related to a Trunk Club property. That per-share loss was a penny wider than what analysts had been in search of.

Nordstrom announced Tuesday that it plans to sunset its Trunk Club business, a private styling platform — somewhat akin to Stitch Fix — that it acquired back in 2014. The corporate said it would be focusing resources as an alternative by itself styling services available at Nordstrom.

Total revenue, including bank card sales, grew to $3.57 billion from $3 billion a 12 months earlier. That beat expectations for $3.28 billion.

At Nordstrom’s namesake banner, net sales grew 23.5%, exceeding pre-pandemic levels. Net sales at Nordstrom Rack rose 10.3% but were still below 2019 levels, the corporate said.

Nordstrom Rack, which competes with off-price chains resembling TJX, Ross Stores and Macy’s Backstage, has struggled more so in the course of the pandemic to secure merchandise from other retail brands, which it may possibly then sell at a markdown. In April, Nordstrom announced plans to streamline ownership of the Rack business because it brought in a bench of executives with prior experience in off-price retail.

“By increasing our supply of premium brands and high quality tuning our assortment to raised align with customer needs, we’re achieving a greater balance of price points on the Rack,” Nordstrom management said in prepared remarks.

Digital sales were flat on a year-over-year basis, as shoppers trimmed their online spending and headed back to stores. E-commerce represented 39% of total sales, compared with 46% a 12 months earlier.

Nordstrom said its urban stores, including its flagship location in Latest York City, performed the strongest in the course of the quarter, as employees returned offices to nearby office buildings and tourist traffic rebounded. Collectively, urban store sales returned to pre-pandemic levels, the corporate said.

Chief Financial Officer Anne Bramman said that, up to now, the corporate hasn’t seen inflationary cost pressures lead to a pullback of customer spending. On a post-earnings conference call, she said that is like as a result of to the “higher income profile and resiliency” of its customers.

Nordstrom ended the three-month period with inventory levels up 23.7% compared with a 12 months earlier, partially because the corporate ordered extra goods to construct a string stock of merchandise ahead of its upcoming, annual Anniversary Sale.

Also on Tuesday, Nordstrom announced it would soon begin to sell shoes from Allbirds, making it certainly one of the sustainable sneaker brand’s few third-party retail partners, and said it had authorized a latest $500 million buyback.

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