Despite this, Nordstrom experienced a 4.6% rise in net sales, reaching $3.35bn in the quarter ending 2 November 2024, up from $3.20bn in Q3 FY23.
The timing of Nordstrom's Anniversary Sale impacted net sales negatively by approximately 100 basis points compared with the third quarter of the previous year, the retailer said.
Q3 FY24 operating performance highlights:
The Nordstrom banner reported a modest 1.3% increase in net sales, while Nordstrom Rack experienced a more substantial 10.6% rise in Q3 FY24. Both banners achieved a comparable sales growth of 4% and 3.9%.
In the earnings call, chief executive officer, director Erik Nordstrom noted that Rack is experiencing significant growth from the addition of new stores, which have become the primary driver of customer acquisition.
Digital sales continued to show strength with a 6.4% increase, representing 34% of total sales during the quarter.
In the third quarter, the company expanded its Marketplace operations, which now features more than 300 sellers providing a diverse range of products to our customers.
Categories such as women's apparel and active saw double-digit growth, with shoes, men's apparel, and kids' wear also performing well at high single-digits. The company saw improved sequential growth in women's apparel, shoes, and men's apparel.
The company's gross profit margin improved slightly to 35.6%, up from 35% last year, primarily driven by strong regular price sales. However, earnings before interest and taxes (EBIT) decreased to $83m from $102m during the same period in fiscal 2023.
Increased selling, general and administrative expenses were noted, rising to 36.6% of net sales due to higher labour costs and charges related to accelerated technology depreciation.
Despite these challenges, Nordstrom ended the quarter with $1.2bn in available liquidity, including $397m in cash.
Nordstrom president Pete Nordstrom said: "Our third quarter results demonstrate that our strategic focus on curating a compelling brand assortment is resonating with customers.
"Our actions throughout this year have led to this moment, and we feel well-positioned for a successful holiday season and look forward to helping our customers celebrate the moments that matter. I'm grateful to our dedicated team for consistently delivering the high level of service our customers have come to expect from Nordstrom."
Full year 2024 outlook:
For fiscal year 2024, Nordstrom forecasts flat to 1% growth in revenue range and expects comparable sales to grow between 1% and 2% versus fiscal 2023. It projects EPS in the range of $1.40 to $1.70 and an EBIT margin between 3 to 3.4% of sales.
To date in fiscal 2024, the company has opened 23 stores, ending the quarter with a total of 381 stores.
In March this year, the founding family behind Nordstrom reportedly sought to take the US department store operator private, a move that comes as no surprise to an industry analyst who believes the store has lost its “retail mojo” after facing mounting pressure from investors.
Nordstrom banner net sales increased 1.3% over the quarter. Credit: Eli Unger/Shutterstock.
sources:
https://press.nordstrom.com/static-files/6e7bef33-380e-4031-98fa-b684ed4ea97c
https://press.nordstrom.com/news-releases/news-release-details/nordstrom-reports-third-quarter-2024-earnings
image: https://www.shutterstock.com/image-photo/toronto-ontario-canadamarch-8th-2023-nordstrom-2272670765
