Nordstrom tops quarterly revenue estimates on resilient demand

(Reuters) – Nordstrom (NYSE:) beat expectations for quarterly revenue on Thursday, benefiting from steady demand from affluent shoppers at a time when still-high inflation is forcing consumers to rethink their non-essential purchases.

The up-market department store chain’s results come at a time when retailers ranging from Macy’s (NYSE:) to Dick’s Sporting Goods (NYSE:) are reeling from a weaker consumer spending environment and are eyeing a dull second half of the year.

Nordstrom’s efforts to stock up its shelves with national and “strategic” brands like Nike (NYSE:), especially at its off-price banner Rack after a disastrous effort to bring in more low-priced goods at its stores, has also helped attract more budget-conscious shoppers.

Net sales in its eponymous stores dropped 10.1%, while Nordstrom Rack posted a 4.1% decrease, both improving sequentially from the first quarter.

To get shoppers, Nordstrom has also been opening more Rack stores, which represents the largest source of new customers, according to the company. However, the company has also winded down its Canadian operations.

Total revenue fell about 8% to $3.77 billion in the second quarter ended July 29, but topped expectations of $3.65 billion, according to Refinitiv data.

Nordstrom, which offered steeper discounts last year to clear excess stock, saw inventories drop for a third time in a row to 17.5% in the quarter, compared to a year ago.

Excluding items, the company earned 84 cents per share. Analysts on average had expected a profit of 44 cents.

Still, Nordstrom joined rival department store chains in maintaining its annual targets.