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Nordstrom Inc. reported better-than-expected results for the holiday quarter on Tuesday, helped by an increase in e-commerce sales and growth in its cheaper business, Rack.
The decline in household income pandemics and high unemployment rates led to an increase in the demand for affordable clothing, which boosted Rack’s business for Nordstrom, which also benefited from a larger move to online shopping.
Sales at Nordstrom Rack decreased by 23% compared to a year earlier, but were better than the previous quarter’s 32% decline, while 54% of the retailer’s digital sales accounted for about $ 2 billion.
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The retailer said overall trends improved continuously throughout the quarter, with improvements in both Nordstrom and Rack.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| JWN | NORDSTROM | 37.58 | -0.39 | -1.03% |
Nordstrom, like other retailers, has invested heavily in e-commerce as consumers move to online shopping after the health crisis.
The retailer reiterated its revenue forecast, saying it would grow by more than 25% this year, with digital responsibility for half of sales and its plans to increase the items it offers to more than 1.5 million from about 300,000.
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“There is no denying that their (Nordstrom) Q4 results have been affected, as fewer consumers go to offices and formal events,” said Hilding Anderson, head of retail strategy at consulting firm Publicis Sapient.
“We expect clothing sales to recover in the second half of 2021 as the vaccine continues and more consumers start traveling and resuming other personal events.”
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According to analysts interviewed by Refinitiv IBES, Wall Street fell 19.7% to $ 3.65 billion in the fourth quarter to end-January. Wall Street predicted $ 3.60 billion.
Net income fell 83% to $ 33 million, mainly driven by higher reductions and COVID-19-induced labor and shipping costs during the holiday season.
On a per share basis, it earns 21 cents, which is well above the 14 cents estimate.