Nordstrom’s Q1 Beats Expectations

It was good to hear good news. Nordstrom

JWN
reported a total increase of 18.7% in sales in the first quarter of 2022. Nordstrom banner stores increased 23.5% and Rack stores increased 10.3%. In the quarter. gross merchandise value (GMV) increased 19.8% compared with in same period of 2021. While sales were still stronger in Southern states, the difference shrank to 3%. The company also indicated that the New York flagship store had the best first quarter since it opened its doors.

The company indicated that it now expects full year net earnings to be between $3.38 and $3.68 per fully diluted shares. Revenues are projected to increase 6 to 8 percent for the full year.

Digital sales, which account for about 39% of total company sales, were flat with last year, indicating that customers were again anxious to shop in Nordstrom and Rack stores. This is a major change, indicating how consumers want to get out of their home and shop. Management indicated men’s and women’s apparel were best sellers and designer clothes had the best growth, indicating that customers wanted to refresh their wardrobe. It is an optimistic sign for the company’s Anniversary Sale, which is slated to start on July 15, 2022.

The company advanced Anniversary Sale purchases, to ensure a full assortment for the occasion. As a result, inventory was up 23.7 percent compared to 18.7 percent at the end of the quarter last year. It was indicated that about one-quarter of the inventory increase was due to the advanced shipment for Anniversary sale. It should make the event more exciting.

Pete Nordstrom, president and chief brands officer of Nordstrom, Inc. said customers remain at the center of everything we do and we continue to provide them with expanded and relevant choices and the differentiated service they expect from us, delivering on our commitment to get closer to you. We are pleased with the momentum we are seeing in the business And excited about our plans for the upcoming Anniversary Sale.”

Nordstrom now will operate one ASOS/Nordstrom store in the second quarter. No Rack stores were open during the quarter but one unit was closed. There are now 240 Rack stores. In addition, there are 7 Rack stores in Canada and there is one “Last Chance” close-out unit. There are 94 Nordstrom Brand stores in the U.S., 6 units in Canada and there are 7 Local service units in Los Angeles and New York City. The company plans to open 2 Rack stores this Fall and two Rack stores next Spring.

POSTSCRIPT: It is encouraging news that shoppers want to update their wardrobe and are receptive for branded fashion that Nordstrom features. It is very likely that the Anniversary sale will be a huge success since the company has lined up the fashion apparel for the Fall season. I am also pleased that the New York flagship store is now attracting more customers.