Nordstrom cut down on promotions, upped inventory
Nordstrom Inc. stock jumped nearly 35% in extended trading Tuesday after the retailer topped quarterly profit expectations, saying it cut down on promotions and kept more merchandise in hand to sidestep supply-chain snags.
Nordstrom JWN, -5.79% said it earned $200 million, or $1.23 a share, in the fourth quarter, compared with $33 million, or 21 cents a share, in the year-ago quarter.
Revenue rose to $4.5 billion from $3.7 billion a year ago, with Nordstrom saying home, active, designer, beauty and kids categories had the strongest growth as compared to the fourth quarter of 2019.
FactSet consensus called for earnings of $1 a share on revenue of $4.4 billion.
“We drove a significant increase in merchandise margin this quarter, as we engaged customers through our compelling and expanded holiday gift offering, while also reducing promotional activity,” President and Chief Brand Officer Pete Nordstrom said in a statement.
Chief Executive Erik Nordstrom said the company’s “primary focus” is on improving Nordstrom Rack performance, increasing profits and optimizing supply-chain and inventory flow.
Nordstrom said it navigated supply-chain disruptions by keeping more merchandise in stock. That resulted in inventory levels that were higher than planned, but Nordstrom said it expects to reduce inventory in the first quarter.
Nordstrom guided for fiscal 2022 revenue growth between 5% and 7% as compared to 2021 and EPS between $3.15 and $3.50, well above FactSet consensus around $2.