Nordstrom beats quarterly estimates, breaking weak demand trend at department stores
2024.11.26 16:33
(Reuters) -Nordstrom beat third-quarter revenue and profit estimates on Tuesday, helped by rising demand for popular brands including On Running, Hoka and Vuori at its department stores.
Shares of the company were up about 1% in extended trading.
Nordstrom (NYSE:) beat third-quarter revenue and profit estimates on Tuesday, helped by rising demand for popular brands including On Running, Hoka and Vuori at its department stores.
Adding fresh and desired brands to its shelves has helped Nordstrom appeal to more customers. The company’s efforts to focus on digital growth and expand Rack stores, its off-price brand, have further boosted sales ahead of a potentially mixed holiday season.
The Seattle, Washington-based company now expects a growth of 1% to 2% from its previous range of flat to a 2% rise.
Apparel chains such as Abercrombie & Fitch and Gap also benefited from customers purchasing their new and trendier product offerings.
Nordstrom bucked the trend on tepid spending at department stores by luring in shoppers for categories including women’s apparel, shoes and men’s apparel, while peers such as Macy’s (NYSE:) and Kohl’s (NYSE:) struggled with patchy demand.
Nordstrom’s total revenue rose 4.3% to $3.46 billion in the quarter ended Nov. 2 from a year earlier. Analysts, on average, estimated a 0.8% rise to $3.35 billion, according to data compiled by LSEG.
Benefits from strong full-price sales and improvements in variable costs across the business helped the upmarket department store chain expand its profit margins.
Its quarterly gross profit as a percentage of sales rose 60 basis points to 35.6%.
The company reported adjusted profit of 33 cents per share for the third quarter, compared with analysts’ expectations of 21 cents apiece.
During the July to September period, foot traffic at Nordstrom and Nordstrom Rack stores grew 1.4% and 5% year over year, respectively, according to Placer.ai data.
In September, Nordstrom’s founding family offered to take the department store chain private for $23 per share, teaming up with a Mexico-based retailer in its latest bid.
