The department store Nordstrom delivered a large surprise profit for its fiscal third quarter, boosting the stock even though sales were light.
Nordstrom (ticker:JWN) said it earned 34 cents a share, while revenue fell 16% to $3.1 billion. Analysts were expecting the company to lose a nickel a share from revenue of $3.13 billion.
Digital sales increased 37% year over year to $1.6 billion, or 54% of the company’s total sales. At the company’s full-price stores, sales slipped 7%, while the Nordstrom Rack division notched a 32% decline.
Management said the off-price Rack segment continues to be the biggest source of new customers, and that it recently further integrated the unit’s inventory with its omnichannel platform, including expanding in-store pickup.
The results included Nordstrom’s Anniversary Sale, which is usually held in the summer but was delayed due to Covid-19. Excluding the benefit of the event, the company said that online sales increased by a percentage in the mid teens, roughly in line with the first half of the year. Full-price sales declined in the mid-20% range excluding the sale’s effects. Gross profits as a percentage of sales decreased by 1.5 percentage points, affected by the move in the Anniversary Sale’s timing and reduced sales volumes.
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