Nordstrom
beat first-quarter earnings and sales expectations, sending the stock higher in after-hours trading on Wednesday.
The department store posted adjusted earnings of 7 cents a share, better than analysts’ estimates for a loss of 10 cents a share. Revenue of $3.2 billion topped projections for $3.1 billion.
In the year-ago quarter, Nordstrom (ticker: JWN) reported an adjusted loss of 6 cents a share and $3.6 billion in revenue. The company’s decision to wind down its Canadian operations resulted in a 1.75 percentage point drag on net sales, but Nordstrom also saw sales decline across most categories compared with last year. Activewear, beauty, and men’s apparel performed above average, the company said.
Gross margin improved in the quarter, up 1.1 percentage points year-over-year, thanks in part to improved inventory positions, the company said.
“We’re encouraged by our momentum, especially given the uncertain macroeconomic environment,” said CEO Erik Nordstrom. “We remain focused on executing with agility and delivering long-term value to our shareholders.”
Nordstrom stock was up 10% to $16.84 in after-hours trading. The stock closed 6% lower on Wednesday.
In addition to the strong results, Nordstrom shares were boosted by the company’s reaffirmation of its financial outlook for fiscal 2023. It continues to expect revenue to fall between 4% and 6%. Adjusted earnings per share will range between $1.80 and $2.20, the company said, in line with Wall Street’s estimates for $1.87 a share.
In the previous quarter, which ended in January, Nordstrom reported earnings per share of 74 cents, ahead of estimates, but missed slightly on both sales of $4.3 billion and same-store sales, which fell 4.6%.
High-end shoppers had been largely insulated from economic challenges that have battered customers with tighter budgets. That’s changed in recent quarters, analysts say, as consumers across all income levels have started to pull back on discretionary spending.
Some retailers catering to higher-income customers have performed well over the quarter, which might bode well for Nordstrom.
LVMH Moët Hennessy Louis Vuitton
(LVMH), for instance, saw first-quarter revenue jump by 17%.
Ralph Lauren
(RL) and Coach parent company
Tapestry
(TPR) handily beat earnings projections, while
Abercrombie & Fitch
(ANF) posted a surprise profit and better same-store sales than what Wall Street was projecting.
Even fellow department store
Kohl’s
(KSS)—which often caters to more middle-income consumers—had an unexpectedly strong quarter. The retailer posted earnings of 13 cents a share, better than calls for a loss of 43 cents, and reaffirmed its guidance for 2023.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
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