Nordstrom, Inc. (JWN) delivered strong second-quarter financial results, surpassing analysts’ estimates for both earnings and revenue. The company’s stock price soared by over 8% in after-hours trading following the release.
The retailer reported earnings of 96 cents per share, exceeding the consensus estimate of 71 cents by a significant 35.21%. Revenue for the quarter came in at $3.894 billion, slightly missing the analyst estimate of $3.896 billion but still representing a solid 3.23% increase year-over-year.
Nordstrom’s performance was driven by strong comparable sales growth, indicating a healthy demand for its products. Total comparable sales increased by 1.9%, with the Nordstrom banner experiencing a 0.9% increase and Nordstrom Rack achieving a more robust 4.1% growth. Digital sales continued their upward trajectory, rising by 6.2%.
The company also reported a notable improvement in its gross profit margin, reaching 36.6% of net sales, an increase of 155 basis points compared to the same period last year. This improvement was attributed to strong regular price sales and leveraging higher total sales.
Despite the positive results, Nordstrom’s inventory levels increased by 8.3%, exceeding the 3.4% increase in sales. This suggests that the company may need to manage inventory more effectively in the coming quarters.
Looking ahead, Nordstrom expects fiscal year earnings to range between $1.75 and $2.05 per share. CEO Erik Nordstrom expressed confidence in the company’s outlook, highlighting the continued topline strength and progress made in expanding gross margins and increasing profitability.
The strong second-quarter results and positive outlook have fueled investor optimism, driving the surge in Nordstrom’s stock price after hours. The company’s commitment to digital growth, profitability, and sustainable momentum positions it well for continued success in the evolving retail landscape.
