Reports EPS of $0.72, adjusted EPS of $0.961
Updates fiscal 2024 outlook
SEATTLE, Aug. 27, 2024 /PRNewswire/ -- Nordstrom, Inc. (NYSE:JWN) today reported second quarter net earnings of $122 million, or earnings per diluted share ("EPS") of $0.72, and earnings before interest and taxes ("EBIT") of $190 million. Excluding a charge primarily related to supply chain asset impairment, the Company reported adjusted EBIT of $244 million and adjusted EPS of $0.96.1
For the second quarter ended August 3, 2024, net sales increased 3.4 percent versus the same period in fiscal 2023, and total Company comparable sales increased 1.9 percent. Gross merchandise value ("GMV") increased 3.5 percent. Anniversary Sale timing, with one week shifting from the third quarter to the second quarter, had a positive impact of approximately 100 basis points on net sales compared with 2023. During the quarter, Nordstrom banner net sales and comparable sales each increased 0.9 percent. Net sales for Nordstrom Rack increased 8.8 percent and comparable sales increased 4.1 percent.
"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, chief executive officer of Nordstrom, Inc. "We're confident in our outlook for the remainder of the year and look forward to sustaining the momentum we've built as we execute on our 2024 priorities."
In the second quarter, active, women's apparel, beauty and kids had the strongest growth versus 2023. During the Anniversary Sale, including one day that fell in the third quarter, the top growing categories were beauty, active and home.
"We're pleased with the Anniversary Sale and the enthusiastic response from our loyal customers. They were highly engaged throughout the event and responded favorably to our assortment, experiences and service," said Pete Nordstrom, president of Nordstrom, Inc. "We appreciate our team's continued efforts to help our customers feel good and look their best."
As previously announced, on August 21, 2024, the board of directors declared a quarterly cash dividend of $0.19 per share, payable on September 18, 2024, to shareholders of record at the close of business on September 3, 2024.
SECOND QUARTER 2024 SUMMARY
Total Company net sales increased 3.4 percent and comparable sales increased 1.9 percent compared with the same period in fiscal 2023. GMV increased 3.5 percent. The timing shift of the Anniversary Sale, with one day falling in the third quarter of 2024 versus eight days in 2023, had a positive impact on net sales of approximately 100 basis points compared with the second quarter of 2023.
Nordstrom banner net sales and comparable sales each increased 0.9 percent compared with the same period in fiscal 2023. GMV increased 1.1 percent. The timing shift of the Anniversary Sale had a positive impact on Nordstrom banner net sales of approximately 200 basis points compared with the second quarter of 2023.
Nordstrom Rack banner net sales increased 8.8 percent and comparable sales increased 4.1 percent compared with the same period in fiscal 2023.
Digital sales increased 6.2 percent compared with the same period in fiscal 2023. The timing shift of the Anniversary Sale had a positive impact on Company digital sales of approximately 100 basis points compared with the second quarter of 2023. Digital sales represented 37 percent of total sales during the quarter.
Gross profit, as a percentage of net sales, of 36.6 percent increased 155 basis points compared with the same period in fiscal 2023, primarily due to strong regular price sales and leverage on higher total sales.
Ending inventory increased 8.3 percent compared with the same period in fiscal 2023, versus a 3.4 percent increase in sales.
Selling, general and administrative ("SG&A") expenses, as a percentage of net sales, of 34.4 percent increased 160 basis points compared with the same period in fiscal 2023, due to a charge primarily related to supply chain asset impairment and a 2023 gain on the sale of a real estate asset, partially offset by leverage on higher sales. Excluding the $54 million charge primarily related to supply chain asset impairment, adjusted SG&A expenses, as a percentage of net sales, were 33.0 percent.
EBIT was $190 million in the second quarter of 2024, compared with $192 million during the same period in fiscal 2023. Adjusted EBIT of $244 million excluded the charge primarily related to supply chain asset impairment.2
Interest expense, net, of $26 million was flat compared with $26 million during the same period in fiscal 2023.
Income tax expense was $42 million, or 25.7 percent of pretax earnings, compared with income tax expense of $29 million, or 17.2 percent of pretax earnings, in the same period in fiscal 2023. The increase in the second quarter of fiscal 2024 was driven primarily by the favorable resolution of certain tax matters in the second quarter of fiscal 2023.
The Company ended the second quarter with $1.5 billion in available liquidity, including $679 million in cash.
STORES UPDATE
To date in fiscal 2024, the Company has opened eleven stores:
City
Location
Square Footage
(000s)
Timing of Opening
Nordstrom Rack
Pinole, CA
Pinole Vista Crossing
23
March 7, 2024
Snellville, GA
Presidential Markets
35
March 7, 2024
Kennesaw, GA
Barrett Place
25
March 21, 2024
Macedonia, OH
Macedonia Gateway
28
April 11, 2024
Gilroy, CA
Gilroy Crossing
25
April 25, 2024
Jacksonville Beach, FL
South Beach Regional
30
May 2, 2024
Queen Creek, AZ
Queen Creek Marketplace
28
May 16, 2024
Elk Grove, CA
The Ridge Elk Grove
25
May 30, 2024
Wheaton, IL
Danada Square East
29
May 30, 2024
Oceanside, CA
Pacific Coast Plaza
32
June 6, 2024
Bay Shore, NY
Gardiner Manor Mall
24
June 13, 2024
The Company has also announced plans to open the following stores:
City
Location
Square Footage
(000s)
Timing of Opening
Nordstrom Rack
San Antonio, TX
Bandera Pointe
25
September 5, 2024
Franklin, TN
Cool Springs Market
24
September 5, 2024
San Mateo, CA
Bridgepointe Shopping Center
36
September 12, 2024
San Diego, CA
Clairemont Town Square
26
September 19, 2024
Mooresville, NC
Mooresville Crossing
28
September 26, 2024
Houston, TX
Meyerland Plaza
34
September 26, 2024
Mason, OH
Deerfield Towne Center
30
October 3, 2024
Fort Myers, FL
Bell Tower
31
October 10, 2024
Raleigh, NC
Triangle Town Place
32
October 10, 2024
Noblesville, IN
Hamilton Town Center
25
October 17, 2024
Omaha, NE
Village Pointe
30
October 24, 2024
Tarzana, CA
Village Walk
25
November 1, 2024
Davis, CA
The Davis Collection
25
Spring 2025
Matthews, NC
Sycamore Commons
25
Spring 2025
Geneva, IL
Randall Square
25
Spring 2025
Manalapan Township, NJ
Manalapan Commons
26
Spring 2025
Apple Valley, MN
Fischer Marketplace
30
Spring 2025
Houston, TX
Westchase Shopping Center
30
Spring 2025
Morrisville, NC
Park West Village
25
Spring 2025
Coral Springs, FL
Pine Ridge Square
31
Fall 2025
Surprise, AZ
Prasada North
26
Fall 2025
The Company had the following store counts as of quarter-end:
August 3, 2024
July 29, 2023
Nordstrom
Nordstrom
93
94
Nordstrom Local service hubs
6
7
ASOS | Nordstrom
—
1
Nordstrom Rack
Nordstrom Rack
269
247
Last Chance clearance stores
2
2
Total
370
351
Gross store square footage
26,563,000
26,348,000
FISCAL YEAR 2024 OUTLOOK
The Company updated its financial outlook for fiscal 2024, which also now reflects the charge primarily related to supply chain asset impairment and related tax impacts recorded in the second quarter, as well as estimated accelerated technology depreciation impacts expected in the second half of fiscal 2024:
Revenue range, including retail sales and credit card revenues, of 1.0 percent decline to 1.0 percent growth versus the 53-week fiscal 2023, which includes an approximately 135 basis point unfavorable impact from the 53rd week
Comparable sales range of flat to 2.0 percent growth versus 52 weeks in fiscal 2023
EBIT margin of 3.0 to 3.4 percent of sales
Adjusted EBIT margin of 3.6 to 4.0 percent of sales3
Income tax rate of approximately 27 percent
EPS of $1.40 to $1.70, excluding the impact of share repurchase activity, if any
Adjusted EPS of $1.75 to $2.05, excluding the impact of share repurchase activity, if any3
CONFERENCE CALL INFORMATION
The Company's senior management will host a conference call to provide a business update and to discuss second quarter 2024 financial results and fiscal 2024 outlook at 4:45 p.m. EDT today. To listen to the live call online and view the speakers' prepared remarks and the conference call slides, visit the Investor Relations section of the Company's corporate website at investor.nordstrom.com. An archived webcast with the speakers' prepared remarks and the conference call slides will be available in the Quarterly Results section for one year. Interested parties may also dial 201-689-8354. A telephone replay will be available beginning approximately three hours after the conclusion of the call by dialing 877-660-6853 or 201-612-7415 and entering Conference ID 13748345, until the close of business on September 3, 2024.
ABOUT NORDSTROM
At Nordstrom, Inc. (NYSE:JWN), we exist to help our customers feel good and look their best. Since starting as a shoe store in 1901, how to best serve customers has been at the center of every decision we make. This heritage of service is the foundation we're building on as we provide convenience and true connection for our customers. Our interconnected model enables us to serve customers when, where and how they want to shop, whether that's in-store at more than 350 Nordstrom, Nordstrom Local and Nordstrom Rack locations or digitally through our Nordstrom and Rack apps and websites. Through it all, we remain committed to leaving the world better than we found it.
Certain statements in this press release contain or may suggest "forward-looking" information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risks and uncertainties that could cause results to be materially different from expectations. The words "will," "may," "designed to," "outlook," "believes," "should," "targets," "anticipates," "assumptions," "plans," "expects" or "expectations," "intends," "estimates," "forecasts," "guidance" and similar expressions identify certain of these forward-looking statements. The Company also may provide forward-looking statements in oral statements or other written materials released to the public. All statements contained or incorporated in this press release or in any other public statements that address such future events or expectations are forward-looking statements. Important factors that could cause actual results to differ materially from these forward-looking statements are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2024, our Form 10-Q for the fiscal quarter ended May 4, 2024, and our Form 10-Q for the fiscal quarter ended August 3, 2024, to be filed with the SEC on or about September 5, 2024. In addition, forward-looking statements contained in this release may be impacted by the actual outcome of events or occurrences related to the Company's announcement of the exploration of possible avenues to enhance shareholder value and the formation of a special committee of the board of directors to consider any proposal which might be brought forward by members of the Nordstrom family to take the Company private. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances. In addition, the actual timing, price, manner and amounts of future share repurchases, if any, will be subject to the discretion of our board of directors, contractual commitments, market and economic conditions and applicable Securities and Exchange Commission rules. This earnings release includes references to websites, website addresses and additional materials, including reports and blogs, found on those websites. The content of any websites and materials named, hyperlinked or otherwise referenced in ...
