Nordstrom soars after raising forecast in retail sector shock


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Nordström (NYSE: JWN) soared in after-hours trading after separating from its retail peers by raising the full-year forecast. The outlook was a shock, with many mall chains warning of slowing consumer spending trends.

Sales increased 18.7% in the fourth quarter and gross merchandise value increased 19.6% from the same period a year ago.

Nordstrom banner net sales increased 23.5% and Nordstrom Rack sales increased 10.3% while continuing to show sequential improvement over pre-pandemic sales levels.

Digital sales in the fourth quarter increased by 18.7% to represent 39% of total sales.

Gross margin increased by 190 basis points to 32.8% of sales compared to the same period of fiscal 2021.

The department store operator’s inventory position at the end of the quarter was up 23.7%. About a quarter of the change in inventory levels was due to anticipation of receipts from the anniversary sale.

Nordstrom (JWN) ended the quarter with $1.3 billion in liquidity, including $484 million in cash and all of the $800 million available on its revolving line of credit.

Looking ahead, Nordstrom (JWN) expects revenue growth of 6% to 8% versus a previous forecast of +5% to +7%. EPS of $3.20-$3.50 is expected against a prior view of $3.15-$3.50 and consensus of $3.17. A leverage ratio of around 2.5X is expected by the end of the year. Nordstrom (JWN) also authorized a $500 million share buyback program.

Update from the CEO: “We are focused on more effectively balancing inventory with demand while increasing the efficiency of our network and delivering novelty and selection to our customers.”

Nordstrom (JWN) shares surged 11.22% in after-hours trading. Macy’s (M) won 3.80% and Dillard (DDS) increased 6.45%.


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