Nordstrom has booked higher sales for the third quarter, driven by the continued strong performance at its off-price Rack business.
The company’s net sales increased 4.6 per cent for the quarter ended November 2, with comparable sales up 4 per cent.
GlobalData MD Neil Saunders said the results were solid despite coming off the back of a very weak prior year.
However, the gains did not completely cancel out the weakness of last year, as overall revenue remains down 2.5 per cent compared to 2022, Saunders continued.
“Over the longer-term horizon, the company remains a modest underperformer,” he added.
On a divisional basis, the company remains one of two halves, with the off-price business motoring nicely while the department store division continuing to face challenges. According to the analyst, the divergence is to be expected as it reflects the wider realities of the retail market.
At Rack, sales grew by a solid 10.5 per cent, which Saunders attributed to new store openings and compelling assortments. He added the segment is being rewarded with a higher share of wallet, better conversion rates and new customers.
At Nordstrom, sales grew only 1.3 per cent due to the impact of store closures and the company’s Anniversary Sale. Despite the somewhat healthy performance, there is much more work to do to bring standards at department stores back up to scratch, Saunders stated.
On the bottom line, net income fell 31.3 per cent to, which the analyst attributed to accelerated technology depreciation and higher general costs.
For the full year, Nordstrom expects revenue, including retail sales and credit card revenues, to be flat or up 1 per cent and comparable sales to grow 1-2 per cent.
