Nordstrom sales fall amid ‘softening’ consumer demand; 17 new Rack stores in works

Marianne Wilson
Editor-in-Chief
Nordstrom opened 11 Nordstrom Rack stores during the quarter.

Nordstrom reported third-quarter profit that topped Street estimates but sales that missed, with declines across both its banners.

But the department store retailer held to its full-year revenue outlook and executives on the earnings call said the company has made progress, with lower markdowns and inventory down by 9%.

“We’ve rightsized our inventory,” Nordstrom president Peter Nordstrom told analysts. “We definitely got it in the right place in terms of the aging and the categories that matter.”

Nordstrom continues to expand its off-price Nordstrom Rack banner, which also saw some improvement during the quarter. The retailer opened 11 new Rack outlets during the quarter and has announced plans for an additional 17 stores (locations listed at end of article.) 

Nordstrom reported third-quarter net income of $67 million, or $.41 cents a share, for the quarter ended Oct. 28, compared to a loss of  $20 million, or $0.13 a share, in year-ago period. Adjusted earnings came to $0.25 a share. Analysts had expected earnings of $0.12 a share.

Revenue slipped 6.8% to $3.32 billion from $3.55 billion, missing estimates of $3.40 billion. Sales fell 9.4% at Nordstrom and were down 1.8% at its off-price banner, Nordstrom Rack. Digital sales decreased by 11.3%.

“In the third quarter we continued to make progress against our priorities, and we're especially pleased with the resulting improvements in gross margin and earnings," stated Erik Nordstrom, CEO, Nordstrom. "Given continued uncertainty and softening consumer spend, we're remaining agile and focused on serving our customers. Thanks to solid execution by our merchants, we're heading into holiday in a favorable inventory position across both banners.”

Nordstrom stuck with its full-year sales outlook for a 4% to 6% drop. It narrowed its adjusted per-share profit estimate to $1.90 to $2.10. In August, the company forecast a profit range of $1.80 to $2.20 a share.

At end of the quarter, the company operated a total of 360 stores, including 258 Nordstrom Rack stores, 93 Nordstrom stores, six Nordstrom Local outposts, two Last Chance clearance outlets and one Asos/Nordstrom Locations. 

Nordstrom has announced plans to open the following Nordstrom Rack stores:

City Location 

Square Footage 

(000s)

 Timing of Opening
       
Pinole, CA Pinole Vista Crossing 23 Spring 2024
Kennesaw, GA Barrett Place 25 Spring 2024
Elk Grove, CA The Ridge Elk Grove 25 Spring 2024
Gilroy, CA Gilroy Crossing 25 Spring 2024
Oceanside, CA Pacific Coast Plaza 31 Spring 2024
Wheaton, IL Danada Square East 29 Spring 2024
Snellville, GA Presidential Markets 35 Spring 2024
Macedonia, OH Macedonia Gateway 28 Spring 2024
Jacksonville Beach, FL South Beach Regional 30 Spring 2024
Queen Creek, AZ Queen Creek Marketplace 28 Spring 2024
Bay Shore, NY Gardiner Manor Mall 24 Spring 2024
San Mateo, CA Bridgepointe Shopping Center 36 Fall 2024
San Diego, CA Clairemont Town Square 26 Fall 2024
Mason, OH Deerfield Towne Center 30 Fall 2024
San Antonio, TX Bandera Pointe 25 Fall 2024
Mooresville, NC Mooresville Crossing 28 Fall 2024
Davis, CA The Davis Collection 25 Spring 2025
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