Nordstrom Reports Second Quarter 2021 Earnings, Raises Fiscal Year Outlook
Broad-based improvement in sales trends at Nordstrom and Nordstrom Rack; strong Anniversary Sale performance
Earnings reflected solid execution and improvements in sales, gross profit, and expense.
Continued balance sheet strengthening, including repayment of $500 million unsecured notes
SEATTLE, WA (STL.News) Nordstrom, Inc. (NYSE: JWN) today reported second-quarter results, which reflected a continued broad-based improvement in sales trends at Nordstrom and Nordstrom Rack across categories and geographies. The Company reported net earnings of $80 million or $0.49 per diluted share, with earnings before interest and taxes (“EBIT”) of $151 million.
For the second quarter ended July 31, 2021, net sales increased 101 percent from the same period in fiscal 2020 and decreased 6 percent from the same period in fiscal 2019, representing a sequential improvement of approximately 700 basis points relative to the first quarter of fiscal 2021. The timing shift of the annual Anniversary Sale, with roughly one week falling into the third quarter of 2021, had a negative impact of approximately 200 basis points on net sales compared with fiscal 2019. Adjusting for this timing shift, sales trends improved by approximately 900 basis points relative to the first quarter.
As consumers refreshed their wardrobes, the Company’s core categories of shoes, apparel, and accessories experienced the largest improvement in sales trends relative to the first quarter. In addition, sales in active, home, and designer categories continued to grow versus 2019.
“Our second-quarter results demonstrate the strength of our two brands, the power of our ‘closer to you’ strategy, and the success of our iconic Anniversary Sale,” said Erik Nordstrom, chief executive officer of Nordstrom, Inc. “We capitalized on improving customer demand with focused execution, healthy inventory sell-through, and continued expense management to deliver strong quarterly results. We remain focused on executing our strategy to win in our most important markets, broaden the reach of Nordstrom Rack and increase our digital velocity, and are well-positioned for continued progress toward our long-term strategic and financial goals as we look ahead to the second half of the year.”
Total Anniversary event sales increased 1 percent compared with 2019, including the final week of the event, which fell in the third quarter. Traffic and sales trends were strong across both digital and stores as customers responded positively to the expanded selection, better in-stock rates on top-selling items, and enhanced capabilities, including convenient pick-up options at Nordstrom and Nordstrom Rack stores.
“A compelling merchandise assortment, combined with new and differentiated services and experiences, contributed to strengthening customer engagement and improving financial results during our Anniversary Sale. We would like to extend our heartfelt thanks to our outstanding employees and brand partners for their contributions to a successful event,” said Pete Nordstrom, president, and chief brand officer of Nordstrom, Inc.
Nordstrom strengthened its financial position in July by retiring the $500 million unsecured 4.0% notes that were due in October 2021 using cash on hand. This will reduce annualized interest expense by $20 million, beginning in the third quarter of fiscal 2021. The Company remains on track to reduce its leverage ratio to approximately three times by year-end.
NOTE: This is NOT the complete release. CLICK to get complete details.