On May 30, 2024, Nordstrom Inc (JWN, Financial) released its 8-K filing for the first quarter of fiscal 2024. The company reported a net loss of $39 million, or a loss per share of $0.24, missing the analyst estimate of -$0.09 per share. However, Nordstrom Inc (JWN) exceeded revenue expectations with net sales of $3,221 million, surpassing the estimated $3,199.92 million.
Company Overview
Nordstrom Inc (JWN, Financial) is a fashion retailer operating approximately 93 department stores and 260 off-price Nordstrom Rack stores. The company also runs 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 products. Founded in 1901, Nordstrom continues to be partially owned and managed by the Nordstrom family.
Performance and Challenges
For the first quarter ended May 4, 2024, Nordstrom Inc (JWN, Financial) reported a 5.1% increase in net sales compared to the same period in fiscal 2023, with total company comparable sales rising by 3.8%. The Nordstrom Rack banner showed significant growth, with net sales up 13.8% and comparable sales increasing by 7.9%. However, the company's gross profit was constrained due to timing issues and other factors, including higher loyalty activity, external theft in the transportation network, and inventory cleanup in the supply chain.
Despite the positive sales growth, profitability fell short of expectations. Gross profit as a percentage of net sales decreased by 225 basis points to 31.6%, primarily due to the aforementioned factors. Additionally, digital sales saw a slight decline of 0.2% compared to the same period in fiscal 2023.
Financial Achievements
Nordstrom Inc (JWN, Financial) reaffirmed its fiscal 2024 outlook, citing strong sales performance as a momentum driver for the rest of the year. The company ended the first quarter with $1.2 billion in available liquidity, including $428 million in cash. The financial position was further strengthened by retiring $250 million notes due in April using cash on hand.
Key financial metrics from the earnings report include:
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Sales | $3,221 million | $3,064 million |
| Gross Profit Margin | 31.6% | 33.8% |
| SG&A Expenses | 35.8% | 36.0% |
| Net Loss | ($39 million) | ($205 million) |
| Loss Per Share | ($0.24) | ($1.27) |
Commentary and Analysis
"The positive sales growth we saw across the company in the first quarter is very encouraging, and we’re particularly excited about the progress that our Rack banner is making," said Erik Nordstrom, CEO of Nordstrom Inc. "While we’re pleased with our topline growth, profitability fell short of our expectations. Looking ahead, our strong sales performance gives us momentum heading into the rest of the year and the confidence to reaffirm our 2024 guidance."
Despite the challenges in profitability, Nordstrom Inc (JWN, Financial) remains optimistic about its future performance. The company's focus on inventory management and customer service is expected to drive continued growth. The reaffirmation of the fiscal 2024 outlook indicates confidence in overcoming current challenges and achieving long-term goals.
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Nordstrom Inc for further details.
