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Pedestrians walk past a Nordstrom Inc. store in Midtown, New York, March 20, 2020.
Gabby Jones | Bloomberg | Getty Images
Nordstrom shares were bullish on Tuesday after the department store announced its third quarter sales rose more than analysts had expected, suggesting it may have a stronger holiday season than some investors were waiting if the trends continue.
Nordstrom shares rose more than 4% in extended trading on Tuesday.
Nordstrom CEO Erik Nordstrom said the retailer has made progress in its online business, especially as its stores have been temporarily closed. Digital sales over the three-month period were $ 1.6 billion and accounted for 54% of the retailer’s business.
He said the company “continued to amplify categories that are relevant to customers during the pandemic, such as sportswear and wellness products. Yet he said it was also looking towards the future with the Covid-19 vaccine and anticipated “pent-up customer demand, especially on occasions like travel or in-person social events. “
He said the retailer’s low-cost store, Nordstrom Rack, could be a major growth engine as it is one of the few in its category with a strong online presence. The company will expand its inventory, especially at the lower price in its stores, he said.
Here’s how the company performed in the fiscal third quarter ended Oct. 31, compared to what analysts expected, based on Refinitiv data:
- Earnings per share: 34 cents vs. expected loss of 6 cents
- Revenue: $ 3.09 billion against $ 3.10 billion expected
Nordstrom said its net income fell to $ 53 million, or 34 cents per share, from $ 126 million, or 81 cents per share, a year earlier. Analysts polled by Refinitiv on average expected the company to lose 6 cents a share.
The company’s total revenue fell to $ 3.09 billion, from $ 3.67 billion a year ago, and was lower than the $ 3.10 billion expected by analysts.
Nordstrom was among the retailers that were forced to close their doors at the start of the coronavirus pandemic. Total sales were down 40% in the first quarter and 53% in the second quarter compared to the same period a year earlier.
In the third quarter, total sales fell only 16%. This includes an impact of around 10 percentage points from the anniversary sale.
“Our anniversary sale is strong proof of our ability to amplify relevant categories, brands and trends to meet changing customer preferences,” Anne Bramman, CFO, said on a conference call.
During the quarter, the company said its top performing merchandise categories were sportswear, home, beauty and designer.
During the conference call, Bramman said the company expects sales to fall within the 20% range in the fourth quarter. But the company expects to generate positive operating cash flow, she said.
Still, she acknowledged that the outlook is uncertain due to the pandemic and said her expectations were based on stores remaining open.
Read the full version of the results here.
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