Nordstrom posts weak holiday sales, cuts FY22 outlook
Nordstrom, Inc. announced a net sales decrease of 3.5 percent for the nine-week holiday period ended December 31, 2022.
For the Nordstrom banner, the company said, net sales decreased 1.7 percent, while net sales at the Nordstrom Rack banner decreased 7.6 percent.
Based on holiday results, the company expects its fiscal 2022 results to be at the lower end of guidance range.
“The holiday season was highly promotional, and sales were softer than pre-pandemic levels. While we continue to see greater resilience in our higher income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment," said Erik Nordstrom, chief executive officer of Nordstrom, Inc. in a release.
Nordstrom initiates measures to end the year in healthy position
The company further said that it took additional markdowns in order to finish the year in a healthy and current inventory position.
The company expects year-end inventory levels to be down by a double-digit percentage compared with last year, and roughly at 2019 levels.
"Having a healthier inventory level and mix positions us well to react quickly to changing consumer demand. Given the continued uncertain environment, we remain focused on executing with flexibility and agility, including conservative buy plans and faster inventory turns," added Pete Nordstrom, president and chief brand officer of Nordstrom, Inc.
Nordstrom updates fiscal 2022 outlook
Nordstrom now expects revenue growth, including retail sales and credit card revenues, at the low-end of its previously issued outlook of 5 to 7 percent.
The company added that EBIT margin, as a percent of sales, is expected to be 2.8 to 3.1 percent, compared with its prior outlook of 4.1 to 4.4 percent, reflecting lower than expected gross margin. Adjusted EBIT margin is expected to range between 3.1 to 3.3 percent, compared with its prior outlook of 4.3 to 4.7 percent.
The company forecasts earnings per diluted share (EPS) in the range of 1.33 dollars to 1.53 dollars, compared with its prior outlook of 2.13 dollars to 2.43 dollars. Adjusted EPS, excluding the impact of share repurchase activity, if any, is expected to be between 1.50 dollars to 1.70 dollars, compared with its prior outlook of 2.30 dollars to 2.60 dollars.
The company is scheduled to report its fourth quarter and full-year 2022 financial results on March 2, 2023.