Despite weakening sales, Nordstrom managed to beat street expectations. The JWM stock price surged by 8% in the pre-market trading on Thursday.
On Wednesday, May 31, high-end department store Nordstrom (NYSE: JWN) announced its first fiscal-quarter sales while beating Wall Street expectations. This comes despite the reporter predicting a spending drop as well as slower sales in the coming months.
Furthermore, Nordstrom also issued guidance and an outlook for the full year. The company said that it expects its revenue to fall by 4% to 6% as well as its adjusted earnings per share to range between $1.80 and $2.20 for the fiscal year. However, this excludes the impact of winding down its stores as well as online business in Canada.
Despite the decline in sales, Nordstrom has stressed its progress with managing inventory while cutting costs on the other hand. During an earnings call, the company reported that sales at both Nordstrom and Nordstrom Rack saw improvement in April, following a satisfactory start to February and a slowdown in March. The positive momentum carried into May for both banners, with Nordstrom Rack showing a particularly strong performance.
Speaking on the development, Nordstrom CEO Erik Nordstrom said:
“We’re encouraged by our momentum, especially given the uncertain macroeconomic environment.”
The company’s share JWM is already up by more than 7.78% in the pre-market hours and is currently trading at $16.49.
For the three-month period ending April 29, Nordstrom reported earnings per share of 7 cents adjusted vs. the expected 8 cents a share. The company also reported a revenue of $3.18 billion vs. $3.12 billion expected.
For the first fiscal quarter, Nordstrom’s net loss stood at $205 million, or $1.27 per share. This is in comparison to a net income of $20 million, or 13 cents per share in the same period a year ago.
Nordstrom Looking at Opportunities for Growth
As Nordstrom has been struggling with sales, it is looking for some green offshoots and an opportunity for growth. The company missed out majorly on the stimulus-fueled spending boom after the pandemic that benefitted several other retailers.
In the fiscal year ending January, the company’s total revenue was $15.5 billion. This figure was absolutely flat than the year before. Nordstrom experienced a decline in sales during the most recent three-month period. The company’s total revenue, including credit card sales, dropped by approximately 11% compared to the same quarter last year. However, Nordstrom managed to exceed Wall Street’s expectations.
In a news release, the company stated that most categories in the US witnessed a decline in sales during the first quarter compared to the previous year. Nordstrom attributed part of this decline to challenging year-over-year comparisons. In the year-earlier period, customers had eagerly visited stores for designer shoes, dresses, and wardrobe updates as the world reopened after the pandemic, attending weddings, reunions, and other social gatherings.
Net sales at Nordstrom’s flagship stores decreased by 11.4% year over year, while net sales for Nordstrom Rack saw a decline of 11.9%.
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