On November 26, 2024, Nordstrom Inc (JWN, Financial) released its 8-K filing for the third quarter of fiscal 2024, reporting net earnings of $46 million, or $0.27 per diluted share. The company also reported an adjusted EPS of $0.33, surpassing the analyst estimate of $0.22. Nordstrom's revenue for the quarter reached $3,347 million, slightly above the estimated $3,345.45 million.
Company Overview
Nordstrom Inc (JWN, Financial) is a renowned fashion retailer operating approximately 93 department stores and over 260 off-price Nordstrom Rack stores. The company also manages full- and off-price e-commerce sites, two clearance stores, and seven Local locations. Nordstrom's largest merchandise categories include women's apparel, shoes, men's apparel, and beauty, contributing significantly to its sales.
Performance Highlights and Challenges
Nordstrom Inc (JWN, Financial) reported a 4.6% increase in net sales compared to the same period in fiscal 2023, with comparable sales rising by 4.0%. The Nordstrom Rack banner showed impressive growth, with net sales increasing by 10.6% and comparable sales by 3.9%. Digital sales also saw a 6.4% increase, representing 34% of total sales during the quarter.
Despite these positive results, the company faced challenges such as a negative impact from the timing shift of the Anniversary Sale, which affected net sales by approximately 100 basis points. Additionally, higher labor costs and a charge related to accelerated technology depreciation increased SG&A expenses as a percentage of net sales.
Financial Achievements and Industry Importance
The company's gross profit margin improved to 35.6%, up 60 basis points from the previous year, primarily due to strong regular price sales. This margin expansion is crucial for Nordstrom Inc (JWN, Financial) as it indicates effective cost management and pricing strategies in the competitive retail sector.
The continued sales growth across the company and strong gross margin in the third quarter indicate our team’s focus and efforts are working," said Erik Nordstrom, CEO of Nordstrom Inc.
Key Financial Metrics
Nordstrom Inc (JWN, Financial) ended the third quarter with $1.2 billion in available liquidity, including $397 million in cash. The company's inventory levels increased by 5.9%, aligning with the sales growth of 4.6%. The adjusted EBIT for the quarter was $97 million, excluding the accelerated technology depreciation charge.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $3,347 million | $3,200 million |
| Gross Profit Margin | 35.6% | 35.0% |
| Adjusted EBIT | $97 million | $77 million |
Analysis and Outlook
Nordstrom Inc (JWN, Financial) has demonstrated resilience and adaptability in a challenging retail environment, achieving sales growth across its banners and expanding its gross margins. The company's strategic focus on curating a compelling brand assortment and enhancing the shopping experience has resonated well with customers, positioning it for a successful holiday season.
Our third quarter results demonstrate that our strategic focus on curating a compelling brand assortment is resonating with customers," said Pete Nordstrom, President of Nordstrom Inc.
Looking ahead, Nordstrom Inc (JWN, Financial) has updated its fiscal 2024 outlook, expecting revenue growth of flat to 1.0% and comparable sales growth of 1.0 to 2.0%. The company remains committed to maintaining its positive momentum and delivering value to its shareholders.
Explore the complete 8-K earnings release (here) from Nordstrom Inc for further details.
