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Nordstrom raises fiscal year outlook

Sep 7, 2021 United States
Nordstrom raises fiscal year outlook
The American chain of luxury department stores reported second quarter results, which reflected continued broad-based improvement in sales trends across categories and geographies
“Our second quarter results demonstrate the strength of our two brands, the power of our "closer to you" strategy and the success of our iconic Anniversary Sale”, started by saying Erik Nordstrom, Chief Executive Officer of Nordstrom. “We capitalized on improving customer demand with focused execution, healthy inventory sell-through and continued expense management to deliver strong quarterly results. We remain focused on executing our strategy to win in our most important markets, broaden the reach of Nordstrom Rack and increase our digital velocity, and are well-positioned for continued progress toward our long-term strategic and financial goals as we look ahead to the second half of the year”, he concluded.

Second Quarter Summary

Total Nordstrom net sales increased by 101% compared with similar period in fiscal 2020, during which stores were temporarily closed for approximately half of the quarter and the Anniversary Sale temporarily shifted to the third quarter. Net sales decreased by 6% relative to the same period in fiscal 2019, a sequential improvement of approximately 700 basis points relative to the first quarter of 2021. The timing shift of the Anniversary Sale, with approximately one week falling into the third quarter of 2021, had a negative impact on net sales of approximately 200 basis points compared with the second quarter of 2019. 
 
For the Nordstrom brand, net sales increased by 127% compared with the same period in fiscal 2020, and decreased by 5% compared with the same period in fiscal 2019. For the Nordstrom Rack brand, net sales increased by 61% compared with the same period in fiscal 2020, and decreased by 8% compared with the same period in fiscal 2019.

Digital sales increased by 30% compared with the same period in fiscal 2020 and increased by 24% compared with the same period in fiscal 2019. 

Gross profit, as a percentage of net sales, of 35% increased approximately 1 370 basis points compared with the same period in fiscal 2020, primarily due to leverage from higher net sales and lower markdowns. Gross profit, as a percentage of net sales, was flat compared with the same period in fiscal 2019, as lower markdowns resulting from healthy inventory sell-through offset deleverage on lower net sales.

Second quarter net income of 80 million US dollars increased from net loss of 255 million US dollars during the same period in fiscal 2020.

Fiscal Year Outlook

Nordstrom took the opportunity to update its fiscal year outlook, and now expects revenue growth, including retail sales and credit card revenues to be more than 35% (compares to prior outlook of more than 25%).

Image credits: models.com

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