A Nordstrom store in Irvine, California.
Scott Mlyn | CNBC
Nordstrom reported fourth-quarter sales and earnings on Tuesday that exceeded analysts’ estimates, thanks to increased demand from online shoppers and the growth of its low-priced Nordstrom Rack business.
But the company warned that it was recently affected by shipping delays, which prevented some of its goods from reaching shelves and warehouses on time. Nordstrom said it is working to sell through this stock, most of which are non-seasonal, during its first fiscal quarter. He said he should return to normal inventory levels in the second quarter.
“Towards 2021, we are taking steps to improve our inventory position,” said CEO Erik Nordstrom in a statement.
The retailer’s shares fell about 3% on the floor after the exchange closed.
See how Nordstrom fared in the quarter ended January 30, compared to what analysts were anticipating, using data from Refinitiv:
- Earnings per share: 21 cents versus 14 cents expected
- Revenue: $ 3.65 billion versus expected $ 3.60 billion
Nordstrom’s net profit shrank to $ 33 million, or 21 cents per share, from $ 193 million, or $ 1.23 per share, a year earlier. That came out better than the 14 cents a share that analysts were anticipating, according to a Refinitiv survey.
Total revenue fell almost 20%, to $ 3.65 billion, from $ 4.54 billion a year earlier. This came before the $ 3.60 billion forecast.
Nordstrom said its digital sales increased 24% over the previous year and accounted for 54% of its total business during the fourth quarter.
Although the department store operator says that the time for the recovery of customer demand from low pandemics remains uncertain, she still expects 2021 tax sales to grow by more than 25%. Analysts had been asking for a 26% revenue growth over the previous year.
E-commerce, on the other hand, should represent about 50% of sales this year. Nordstrom recently described this forecast in a virtual investor day, where it said it also plans to invest more in the growth of Nordstrom Rack’s online business. This outlook assumes that Nordstrom stores will remain open throughout the year, the company said.
Nordstrom is not the only retailer facing headwinds in transportation. Delayed ports in the U.S. and high shipping costs continue to affect companies that sell everything from clothing and shoes to household appliances and fitness equipment.
As shoppers return to stores, the persistent problem can make it even more difficult for retailers to plan their inventory and keep shelves full of products.
Nordstrom’s shares have risen about 8% in the past 12 months, since the market closed on Tuesday. The retailer has a market capitalization of $ 5.93 billion, which is less than that of Kohl, but greater than that of Macy’s.
Find the full Nordstrom press release here.