Shoppers walk into a Nordstrom department store in Austin, Texas, March 3, 2023.
Brandon Bell | Getty Images
Nordstrom on Friday raised its full-year sales outlook, after holiday shopping at its stores and on its website came in stronger than the department store’s cautious expectations.
The company stuck by its profit guidance, despite the higher sales guidance.
The Seattle-based retailer said it now expects full-year revenue growth of 1.5% to 2.5%, including the impact of having one fewer fiscal week. That compares to its previous outlook of flat to up 1%.
Nordstrom struck a conservative note with its outlook in late November, despite topping Wall Street’s expectations for fiscal third-quarter sales. It had projected full-year revenue to range from flat to up 1%. It said adjusted earnings for the year would range from $1.75 and $2.05 per share. Its revenue includes retail sales and credit card revenue.
On an earnings call at the time, CEO Erik Nordstrom said the company had seen “a noticeable decline in sales trends towards the end of October” and factored that into its forecast.
Yet in a news release on Friday, he chalked up better-than-expected holiday sales to the company’s “efforts to remain competitive in the promotional environment and the strength of our offering.”
Nordstrom said net sales rose 4.9% and comparable sales, a metric that takes out the impact of store openings and closures, increased 5.8% for the nine-week holiday period that ended Jan. 4 compared with the year-ago quarter that ended Dec. 30.
During the holiday period, net sales at the Nordstrom banner increased 3.7% and comparable sales rose 6.5%. At Nordstrom Rack, the company’s off-price banner, net sales were up 7.4% and comparable sales increased 4.3%.
The department store operator’s results provide more insights for investors monitoring the health of U.S. consumers and the performance of retailers during the key shopping season. Retailers, including Walmart, Best Buy, Macy’s and others, will report earnings starting in late February.
So far, early holiday numbers have looked promising. Online spending in the U.S. rose nearly 9% from Nov. 1 through Dec. 31 compared to the year-ago period and totaled $241.4 billion, according to Adobe Analytics. Retail sales for the holiday season in the U.S., excluding automotive sales, rose 3.8% year over year for the period from Nov. 1 through Dec. 24, according to Mastercard SpendingPulse, which measures in-store and online sales across payment types.
Nordstrom’s update comes as the founding family prepares to take the retailer private. Nordstrom announced in late December a roughly $6.25 billion buyout deal with the family and Mexican department store El Puerto de Liverpool. The transaction, which was approved by the company’s board of directors, is expected to close in the first half of 2025.
Shares of Nordstrom closed at $24.01, down roughly 4% from its 52-week high. The company is scheduled to report its full fourth-quarter and full-year results on March 4.
