Nordstrom to go with sole CEO
Nordstrom announced management and board changes amid disappointing earnings for its fourth quarter.
The department store retailer said it will move from its co-president management structure to a sole CEO, with Erik Nordstrom to serve in the role. Pete Nordstrom has been named president of Nordstrom Inc. and chief brand officer. Both Erik and Pete Nordstrom will remain on the board.
“These titles help clarify our respective roles, as we strive to maximize our impact both as individual leaders and as a team,” said Erik Nordstrom. “Pete and I continue to be partners in ensuring Nordstrom’s success, and we are both focused on executing our long-term plan. We look forward to continue working with our Board to deliver on our shared vision for the future of Nordstrom.”
In other changes, Nordstrom board members Kevin Turner and Gordon Smith will not seek re-election at the end of their terms at Nordstrom’s annual shareholders meeting on May 20, 2020. The board is working with an external executive search firm for director candidates to fill their seats.
Additionally, in changes designed to enhance its corporate governance, the maximum size of the Nordstrom board will shrink from 11 to 10 during the next two years and a 10-year term limit is being introduced for independent directors.
Nordstrom reported net earnings of $193 million for the quarter ended Feb.1, compared with $248 million in the year-ago period. Adjusted earnings per share were $1.42. Analysts had expected $1.47 per share.
Total revenue grew to $4.54 billion from $4.48 billion, just missing the $4.56 billion expected by analysts. Full-price net sales increased 1.0%. Off-price net sales increased 1.8%. Digital sales grew 9% and represented 35% of sales. Online order pickup contributed more than half of digital sales growth in full-price.
For fiscal 2019, Nordstrom’s net earnings were $496 million compared with $564 million for the previous year. Fiscal 2019 included integration charges and debt refinancing costs of $29 million, after tax.
“Through our customer focus, inventory efficiencies and expense discipline, we drove improvement in sales trends in Full-Price and Off-Price, and we increased profitability during the second half of the year,” said Erik Nordstrom. “Our 2019 results reflected the accelerated roll out of our market strategy, our strength of Nordstrom Rack’s execution, improved merchandise margins and realized expense savings that were 10 percent above our plan, As we move forward, we are further leveraging digital capabilities and scaling our market strategy to drive sales and earnings growth.”