Nordstrom Posts Q4 Gains, but 2024 Outlook Is Soft
Nordstrom Inc., demonstrating that turnaround efforts are kicking in, reported gains on both the top and bottom lines for the fourth quarter.
Lifted by improved top-line performance at the Rack off-price division, Nordstrom reported fourth-quarter net earnings of $134 million, or 82 cents a diluted share, compared to earnings of $119 million, or 74 cents a share, in the year-ago period.
Earnings before interest and taxes were $215 million in the fourth quarter of 2023, compared with $187 million during the same period in fiscal 2022. Adjusted EBIT of $247 million for the fourth quarter of 2023 excluded a supply chain asset impairment charge. EBIT was $251 million for fiscal 2023, and adjusted EBIT of $567 million excluded charges related to the wind-down of Canadian operations reported in the first and third quarters and a supply chain asset impairment charge in the fourth quarter.
Net sales in the latest quarter rose 2.2 percent to $4.3 billion last quarter versus $4.2 billion in the year-ago period. Gross merchandise value, or GMV, increased 2 percent.
By division, Nordstrom banner net sales in the fourth quarter decreased 3 percent and GMV decreased 3.4 percent, compared with the fourth quarter of 2022.
Net sales for Nordstrom Rack increased 14.6 percent.
“We delivered on our 2023 guidance and are confident in our expectations for continued sales improvement and sustained profitability in 2024,” said Erik Nordstrom, chief executive officer of Nordstrom Inc. “We’re laser-focused on efforts we know will drive growth and profitability across the business over the next few years, including new Rack store openings, Nordstrom digital growth and increasing comp-store sales. We have a strong team dedicated to building on our heritage of service, and we look forward to helping our customers feel good and look their best in the year ahead.”
In the fourth quarter, active, beauty and women’s apparel had the strongest growth versus 2022.
“In 2023, we continued to make progress against the priorities we identified at the outset of the year to improve the customer experience and drive better financial results. Across both banners, we improved our merchandise assortment by effectively managing our inventory levels and investing in the products and brands we know our customers respond to,” said Pete Nordstrom, president of Nordstrom Inc. “This year we’ll build on that progress in merchandising and other green shoots across our business as we focus our efforts on our refreshed 2024 priorities.”
In its statement released Tuesday, the company expects fiscal 2024 to be “a year of continued momentum in its growth and profitability drivers, including opening new Rack stores, growing Nordstrom banner digital sales and driving comparable store sales across both banners.”
For all of 2023, Nordstrom posted sales of $14.22 billion, compared to $15.09 billion in 2022. Net earnings dropped to $134 million in 2023 versus $245 million in 2022.
Despite the holiday period gains, the company forecasts for fiscal 2024:
A revenue range, including retail sales and credit card revenues, of a 2 percent decline to 1 percent growth versus the 53-week fiscal 2023, which includes an approximately 135 basis-point unfavorable impact from the 53rd week.
Comparable sales range of between a 1 percent decline to a 2 percent increase versus 52 weeks in fiscal 2023.
EBIT margin of 3.5 to 4 percent of sales