Nordstrom posts Q2 loss as sales plunge 53%

Nordstrom swung to a second-quarter loss amid closed stores due to the pandemic and a change in the timing of its biggest annual event.

Nordstrom reported a net loss of $255 million, or $1.62 per share, for the quarter ended Aug.1, compared with net income of $141 million, or $0.90 a share, in the year-ago period. Analysts expected a loss of $1.48 per share.

“At the onset of the pandemic, we focused on protecting and enhancing liquidity, and we successfully executed on these plans,” said Erik Nordstrom, CEO. “Thanks to our team’s efforts during the second quarter, we further strengthened our balance sheet with liquidity of $1.3 billion and generated operating cash flow of more than $185 million. We are now pivoting to prioritize market share gains and profitable growth as we advance our strategies.”

Total revenue fell to $1.86 billion from $3.87 billion a year ago, missing the $2.38 billion that analysts estimated. Net sales fell 53% to $1.78 billion as its stores remained dark for about half of the quarter. 

In addition, Nordstrom said its sales also took a hit due the shift of its popular Anniversary Sale from the second to the third quarter.

Online sales decreased 5%. Excluding the impact of the shifting of the Anniversary Sale, digital sales rose about 20% in the quarter and were up in the mid-teens range on a year-to-date basis, the company said.

In July, Nordstrom increased inventory receipts to meet customer demand, particularly for its Anniversary Sale, which began with early access for Nordy Club customers on August 4 and all customers on Aug. 19. To date, Anniversary sales are tracking in-line with expectations, reflecting improvement in underlying trends relative to July, the company said.

“We’re confident that we can improve sales trends in the second half of the year and beyond,” said Pete Nordstrom, president and chief brand officer of Nordstrom. “Our inventories are current and in-line, and we're focused on amplifying relevant categories, brands and trends to meet customers’ changing preferences.”