Nordstrom racks up on off-price stores and online sales
Digital sales of about $2 billion accounted for 54% of the retailer’s business.
Nordstrom Inc on Tuesday reported better-than-expected results for the holiday quarter, aided by a rise in e-commerce sales and growth in its off-price business, Rack.
Pandemic-induced declines in household income and high unemployment rates have led to a spike in demand for affordable clothing, which boosted Rack’s business for Nordstrom that also benefited from a greater shift to online shopping.
Sales at Nordstrom Rack decreased 23% from a year earlier, but were better than previous quarter’s 32% slump, while digital sales of about $2 billion accounted for 54% of the retailer’s business.
NORDSTROM CLOSING 16 STORES ON CORONAVIRUS FALLOUT
The retailer said overall trends improved sequentially throughout the quarter, with improvements in both Nordstrom and Rack.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JWN | NORDSTROM INC. | 22.25 | -0.41 | -1.81% |
Nordstrom, like other retailers, has been investing heavily on e-commerce, as consumers shift to shopping online in the wake of the health crisis.
The retailer reiterated its revenue forecast and said it will grow more than 25% this year, with digital accounting for half of the sales and its plans to increase the items it offers to more than 1.5 million from roughly 300,000.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
“There is no denying that their (Nordstrom) Q4 results were impacted, as fewer consumers go to offices and formal events,” said Hilding Anderson, head of retail strategy at consulting firm Publicis Sapient.
“We expect apparel sales to rebound in the second half of 2021 as the vaccine rollout continues and more consumers begin to travel and resume other in-person events.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Total revenue fell 19.7% to $3.65 billion in the fourth quarter ended Jan. 30. Wall Street had forecast $3.60 billion, according to analysts surveyed by Refinitiv IBES.
Net income fell 83% to $33 million, largely hurt by higher markdowns and COVID-19-induced labor and shipping expenses during the holiday season.
On a per share basis, it earned 21 cents, well above the estimate of 14 cents.