JWN Boosts Sales Outlook

Nordstrom Raises Full-Year Sales Outlook after Strong Holiday Shopping

Shoppers walk into a Nordstrom department store in Austin, Texas, on March 3, 2023.

Nordstrom, the Seattle-based retailer, raised its full-year sales outlook on Friday, after holiday shopping at its stores and on its website came in stronger than the company’s cautious expectations.

The department store operator stuck by its profit guidance despite the higher sales guidance. Nordstrom now expects full-year revenue growth of 1.5% to 2.5%, which includes the effect of having one fewer fiscal week. This compares to its previous outlook of flat to up 1%.

Better-than-Expected Holiday Sales

The company attributed its better-than-expected holiday sales to its efforts to remain competitive in the promotional environment and the strength of its offering. Net sales rose 4.9% and comparable sales, a metric that takes out the effect of store openings and closures, increased 5.8% for the nine-week holiday period that ended January 4 compared to the year-ago quarter that ended December 30.

Performance by Brand

During the holiday period, net sales at the Nordstrom banner increased 3.7% and comparable sales rose 6.5%. At Nordstrom Rack, the company’s off-price banner, net sales were up 7.4% and comparable sales increased 4.3%.

Industry Insights

Nordstrom’s update provides more insights for investors monitoring the health of U.S. consumers and the performance of retailers during the key shopping season. So far, early holiday numbers have looked promising. Online spending in the U.S. rose nearly 9% from November 1 through December 31 compared to the year-ago period and totaled $241.4 billion, according to Adobe Analytics. Retail sales for the holiday season in the U.S., excluding automotive sales, rose 3.8% year over year for the period from November 1 through December 24, according to Mastercard SpendingPulse, which measures in-store and online sales across payment types.

Takeover by Founding Family

Nordstrom’s update comes as the founding family prepares to take the retailer private. The company announced in late December a roughly $6.25 billion buyout deal with the family and Mexican department store El Puerto de Liverpool. The transaction, which was approved by the company’s board of directors, is expected to close in the first half of 2025.

Conclusion

Nordstrom’s better-than-expected holiday sales and revised full-year outlook suggest that the retailer is well-positioned to navigate the competitive retail landscape. The company’s efforts to remain competitive in the promotional environment and the strength of its offering have paid off, resulting in a strong holiday season. As the company prepares to go private, investors will be watching closely to see how the retailer performs in the coming months.

FAQs

Q: What is Nordstrom’s revised full-year sales outlook?
A: Nordstrom expects full-year revenue growth of 1.5% to 2.5%, which includes the effect of having one fewer fiscal week.

Q: Why did Nordstrom’s holiday sales exceed expectations?
A: The company attributed its better-than-expected holiday sales to its efforts to remain competitive in the promotional environment and the strength of its offering.

Q: What is the status of Nordstrom’s takeover by the founding family?
A: The company announced a roughly $6.25 billion buyout deal with the family and Mexican department store El Puerto de Liverpool in late December, which is expected to close in the first half of 2025.