Nordstrom sales drop, names Erik Nordstrom sole CEO

Nordstrom posted fourth quarter net sales growth of 1.3 percent, which the company said, improved by more than 400 basis points from year-to-date trends, with growth in Nordstrom’s full-price and off-price businesses. Earnings per diluted share for the quarter were 1.23 dollars, while for fiscal 2019, the company reported earnings per diluted share of 3.18 dollars. Full year net sales decreased 2.2 percent compared with fiscal 2018. The company also announced that it will transition from its co-president structure to a sole chief executive officer, with Erik Nordstrom to serve in this role.

“Through our customer focus, inventory efficiencies and expense discipline, we drove improvement in sales trends in full-price and off-price, and we increased profitability during the second half of the year. Our 2019 results reflected the accelerated roll out of our market strategy, our strength of Nordstrom Rack’s execution, improved merchandise margins and realized expense savings that were 10 percent above our plan,” said Erik Nordstrom, Chief Executive Officer, Nordstrom, Inc.

Nordstrom announces changes to its board of directors

The company said, current board members Kevin Turner and Gordon Smith have chosen not to seek re-election to the board at the expiration of their respective terms at the company’s annual shareholders meeting on May 20, 2020.

“Kevin and Gordon each have made invaluable contributions to our board, including through their important roles as chairs of the technology and corporate governance and nominating committees, respectively,” said Brad Smith, Chairman of Nordstrom’s board of directors.

Additionally, the board has announced planned changes designed to enhance its corporate governance. This will include reducing the maximum size of the board from 11 to 10 over the next two years and introducing a 10-year term limit for independent directors. The company also announced that it will transition from its co-president structure to a sole chief executive officer, with Erik Nordstrom to serve in this role. Pete Nordstrom has been named as the company’s President of Nordstrom Inc. and Chief Brand Officer. The new titles reflect their current and ongoing responsibilities. Both Erik and Pete Nordstrom will remain on the company’s board of directors.

Highlights of Nordstrom’s Q4 and full year results

Fourth quarter net earnings were 193 million dollars compared with 248 million dollars during the same period in fiscal 2018. EBIT was 299 million dollars or 6.7 percent of net sales compared with 333 million dollars or 7.6 percent of net sales for the same period in fiscal 2018. The company added that in full-price, net sales increased 1 percent and 1.8 percent in off-price, while digital sales grew 9 percent and represented 35 percent of sales. Gross profit, as a percentage of net sales, of 35 percent decreased 9 basis points compared with the same period in fiscal 2018.

Full year net earnings were 496 million dollars compared with 564 million dollars for fiscal 2018. EBIT was 784 million dollars or 5.2 percent of net sales, compared with 837 million dollars or 5.4 percent of net sales, for fiscal 2018. In full-price, net sales decreased 3.5 percent, while in off-price, net sales increased 0.2 percent. The company’s digital sales grew 7 percent and represented 33 percent of sales. Gross profit, as a percentage of net sales, of 34.4 percent was flat compared with fiscal 2018.

For fiscal 2020, the company expects net sales to grow in the range of 1.5 percent to 2.5 percent, EBIT to range between 815 million dollars to 855 million dollars, EBIT margin between 5.3 to 5.5 percent and earnings per diluted share in the range of 3.25 to 3.50 dollars.

Picture:Nordstrom press room