Nordstrom reported third-quarter earnings that bested analysts forecasts, helped by strong growth online.
The department store retailer’s net income fell to $53 million, or $0.34 per share, in the quarter ended Oct. 31, from $126 million, or $0.81 per share, in the year-ago period. Analysts had expected a loss of $0.06 per share. (Nordstrom’s net profit for the quarter included an income tax benefit of $19 million associated with the Cares Act.)
Net sales fell 16% to $3.09 billion, which included an approximately 10-percentage point impact from the shift of Nordstrom’s popular Anniversary Sale from the second to the third quarter. Analysts were expecting sales of $3.10 billion. Top-performing merchandise categories included active, home, beauty and designer.
In Nordstrom’s full-price business, net sales decreased 7%. Excluding the Anniversary Sale shift, sales decreased in the mid-twenties percent range. In Nordstrom Rack off-price business, net sales decreased 32%.
Digital sales rose 37% to $1.6 billion and accounted for 54% of Nordstrom’s business.
“Our ability to significantly strengthen our financial flexibility early in the pandemic was key to delivering operating profitability of more than $100 million and cash flow of more than $150 million in the third quarter,” said Erik Nordstrom, CEO of Nordstrom.” We also unlocked new ways to better serve customers on their terms with greater convenience and connection, including expansion of our online order pickup services to nearly 350 locations across both Nordstrom and Nordstrom Racks.”
Nordstrom said it is continuing to leverage digital and physical capabilities to fuel growth of Nordstrom Rack, which represents the biggest source of new customers.
In October, the retailer further integrated its store and online inventory, which resulted in 30,000 customer choices added to online merchandise selection, more than 10% of online orders picked up at Nordstrom Rack stores and approximately 25% of online orders fulfilled at stores.