On August 27, 2024, Nordstrom Inc (JWN, Financial) released its 8-K filing for the second quarter of fiscal 2024. The fashion retailer, which operates about 93 department stores and more than 260 off-price Nordstrom Rack stores, reported mixed results for the quarter.
Company Overview
Nordstrom Inc (JWN, Financial) is a fashion retailer that operates approximately 93 department stores and over 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. The company traces its history back to a shoe store opened in Seattle in 1901 and continues to be partially owned and managed by members of the Nordstrom family.
Q2 2024 Financial Performance
For the second quarter ended August 3, 2024, Nordstrom Inc (JWN, Financial) reported net earnings of $122 million, or earnings per diluted share (EPS) of $0.72, falling short of the analyst estimate of $0.73. However, the company reported adjusted EPS of $0.96, which excludes a charge primarily related to supply chain asset impairment. Net sales for the quarter increased by 3.4% to $3,785 million, falling short of the analyst estimate of $3,895.51 million.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $3,785 million | $3,662 million |
| EPS | $0.72 | $0.84 |
| Adjusted EPS | $0.96 | N/A |
| EBIT | $190 million | $192 million |
| Adjusted EBIT | $244 million | N/A |
Performance Highlights
Nordstrom Inc (JWN, Financial) saw positive sales across both its banners and digital platforms during the second quarter. The Nordstrom banner net sales and comparable sales each increased by 0.9%, while Nordstrom Rack net sales surged by 8.8% and comparable sales rose by 4.1%. Digital sales also saw a 6.2% increase, representing 37% of total sales during the quarter.
"Our second quarter results were solid, and we’re encouraged by the continued topline strength in both banners and the progress we’re making to expand gross margin and increase profitability," said Erik Nordstrom, CEO of Nordstrom Inc.
Challenges and Achievements
Despite the positive sales growth, Nordstrom Inc (JWN, Financial) faced challenges with increased selling, general, and administrative (SG&A) expenses, which rose to 34.4% of net sales, up 160 basis points from the same period in fiscal 2023. This increase was primarily due to a charge related to supply chain asset impairment and a 2023 gain on the sale of a real estate asset.
On the positive side, the company reported a gross profit margin of 36.6%, an increase of 155 basis points compared to the same period in fiscal 2023, driven by strong regular price sales and leverage on higher total sales.
Updated Fiscal 2024 Outlook
Nordstrom Inc (JWN, Financial) updated its financial outlook for fiscal 2024, now expecting a revenue range of a 1.0% decline to 1.0% growth versus the 53-week fiscal 2023. The company also projects an EPS range of $1.40 to $1.70 and adjusted EPS of $1.75 to $2.05.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Nordstrom Inc for further details.
