A Citi Bike docking station in front of the Nordstrom flagship store in Novel York, February 21, 2024.
Bing Guan | Bloomberg | Getty Images
Nordstrom missed Wall Street’s quarterly earnings expectations on Thursday as its Rack chain of brick-and-mortar stores outperformed its peers.
Despite disappointing profits, the Seattle department store operator reported an enhance in sales and maintained its forecast for the full year.
Here’s the retailer’s fiscal first-quarter report compared to Wall Street expectations, based on a survey of analysts conducted by LSEG:
- Loss per share: 24 cents against the expected 8 cents
- Income: $3.34 billion against the expected $3.20 billion
Nordstrom shares fell about 7% in extended trading.
To fuel growth, Nordstrom has relied on its Nordstrom Rack pricing chain. In the quarter, it opens further Rack stores, including nine. It is on track to open a total of 22 modern Rack stores this year.
However, Rack, which offers branded products at lower prices, lags behind rivals such as: TJ Maxx owned by TJX and Marshalls.
However, there were signs of progress in the off-price chain this quarter. It outperformed flagship brand Nordstrom, with comparable sales up 7.9% year-over-year. Comparable sales of the company’s flagship brand increased 1.8%.
The retailer confirmed it expects earnings for the full fiscal year of $1.65 to $2.05. Nordstrom expects full-year revenue to range from a 2% decline to a 1% gain compared to the prior year.
Nordstrom reported a net loss of $39 million in its fiscal first quarter, compared with a net loss of $205 million in the prior-year period. The company’s total revenue increased to $3.34 billion from $3.18 billion in the previous year.
Sportswear sales drove the company to double-digit growth this quarter as customers bought apparel and footwear from brands including Adidas, Vuori and Hoka, CEO Pete Nordstrom said on an earnings call.
According to the company, double-digit growth was also recorded in children’s and women’s clothing, and cosmetics sales increased by single digits.
The results come as the Nordstrom family again considers taking the company private. Last month it announced that it had formed a special commission to evaluate the offers.
Thursday’s quarterly results were the company’s first since the death earlier this month of former CEO Bruce Nordstrom, father of CEO Erik Nordstrom and Pete Nordstrom.
Nordstrom, like its department store rivals, is trying to attract teenage consumers by banking on an aging customer base.
