Nordstrom Q2 sales drop 8.3 percent

Nordstrom, Inc. reported second quarter net earnings of 137 million dollars or earnings per diluted share (EPS) of 84 cents and EBIT of 192 million dollars.

The company’s net sales decreased 8.3 percent compared to a decrease of 11.6 percent in the first quarter, reflecting sequential improvement in sales at both Nordstrom and Nordstrom Rack. Gross merchandise value (GMV) decreased 8.5 percent.

"We've worked hard to improve our operating model, and our solid results reflect the continued progress we made against our top priorities to improve Nordstrom Rack performance, increase inventory productivity and deliver efficiencies through supply chain optimization," said Erik Nordstrom, chief executive officer of Nordstrom, Inc.

Highlights of Nordstrom’s Q2 results

During the quarter, Nordstrom banner net sales decreased 10.1 percent and GMV decreased 10.4 percent. Net sales for Nordstrom Rack decreased 4.1 percent.

In the second quarter, active and beauty grew by low single-digits versus 2022. Kids' apparel and men's apparel performed better than average for the quarter.

Gross profit of 35 percent decreased 20 basis points.

"Our annual Anniversary Sale was a successful event, especially among our most loyal customers. We were pleased by the strong sell-through of new merchandise from the best brands, both in stores and online. We were also encouraged by sequential improvement in sales trends at both Nordstrom and Rack," added Pete Nordstrom, president and chief brand officer of Nordstrom, Inc.

On August 16, 2023, the company’s board of directors declared a quarterly cash dividend of 19 cents per share, payable on September 13, 2023, to shareholders of record at the close of business on August 29, 2023.

Nordstrom forecasts FY23 revenues to decline between 4 to 6 percent

Nordstrom forecasts revenue decline, including retail sales and credit card revenues, of 4 to 6 percent versus fiscal 2022.

The estimated decline includes an approximately 250 basis point negative impact from the wind-down of Canadian operations and an approximately 130 basis point positive impact from the 53rd week.

The company expects an EBIT margin of 1.5 to 2 percent of sales, adjusted EBIT margin of 3.7 to 4.2 percent of sales, EPS of 60 cents to 1 dollar and adjusted EPS of 1.80 dollars to 2.20 dollars.