Home » Nordstrom (JWN) reports Q4 2021 earnings beat

Nordstrom (JWN) reports Q4 2021 earnings beat

by News Times USA

Shoppers leave a Nordstrom store on May 26, 2021 in Chicago, Illinois.

Scott Olson | Getty Images News | Getty Images

Nordstrom on Tuesday reported better-than-expected profits and sales for the holiday quarter, prompting the retailer to offer an optimistic outlook for the coming year in spite of ongoing supply chain concerns and rampant inflation.

Shares of Nordstrom spiked more than 30% in after-hours trading immediately following the report.

Importantly, the retailer called out improvements in its off-price business, Nordstrom Rack, amid a report that the company has been reviewing a potential spinoff of the segment following its underperformance in recent quarters.

For its fiscal fourth quarter, Nordstrom said net sales at Rack were down 5% on a two-year basis, marking a sequential improvement from the prior quarter, when its off-price segment logged an 8% decline compared with 2019.

Still, the segment lags Nordstrom’s full-line business, with that revenue stream rebounding to essentially flat with 2019 levels.

Nordstrom CEO Erik Nordstrom said in a statement that the department store chain is focused on three key things: Improving Nordstrom Rack’s performance, increasing profitability and optimizing supply chain and inventory flow.

Here’s how the retailer performed in its fourth quarter compared with what Wall Street was anticipating, according to a survey of analysts by Refinitiv:

  • Earnings per share: $1.23 vs. $1.02 expected
  • Revenue: $4.49 billion vs. $4.35 billion expected

Nordstrom’s net income for the three-month period ended Jan. 29 grew to $200 million, or $1.23 per share, from $33 million, or 21 cents a share, a year earlier. That topped estimates for per-share earnings of $1.02, according to Refinitiv.

Total revenue, including credit card sales, grew to $4.49 billion from $3.65 billion a year earlier. That topped estimates for $4.35 billion. Net sales, which don’t include credit card revenue, increased 23% year over year but decreased 1% compared with 2019 levels.

The department store chain said that its home, active, designer, beauty and kids categories were the strongest performers, as shoppers sought comfortable clothing and more items to spruce up their homes.

Suburban stores also continued to perform better than urban locations, it said. That’s in large part due to a lack still of international tourists in the U.S.

Digital sales, which saw a boost during the earlier days of the pandemic with consumers e stuck at home, fell 1% compared with the same period in 2020. They rose 23% on a two-year basis, however, and accounted for 44% of total revenue in the quarter.

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