US' Nordstrom's revenue expected to grow by 5–7% in FY22

Nordstrom, Inc reported a 2.9 per cent decrease in net sales to $3.4 billion in Q3 FY22, compared to the corresponding period in fiscal 2021. The timing shift of the Anniversary Sale, with one day falling into the third quarter of 2022 versus roughly one week in 2021, had a negative impact on net sales of approximately 200 basis points compared with the third quarter of 2021, Nordstrom, Inc said in a press release.

In Q3 FY22, the company’s digital sales decreased 16.4 per cent compared with the same period in fiscal 2021. The timing shift of the Anniversary Sale had a negative impact on company digital sales of approximately 300 basis points compared with the third quarter of 2021.

Gross profit of Nordstrom, Inc, as a percentage of net sales, was 33.2 per cent in Q3 FY22, a decline of 190 basis points compared with the same period in fiscal 2021, primarily due to higher markdown rates. The company incurred approximately $100 million in incremental markdowns in the third quarter, out of the approximately $200 million expected in the second half of fiscal 2022.

Selling, general, and administrative expenses, as a percentage of net sales, were 36.4 per cent, showing a growth of 200 basis points compared with the same period in fiscal 2021, primarily due to a supply chain technology and related asset impairment charge, partially offset by fulfilment expense efficiencies.

The company’s EBIT was $3 million in the third quarter of 2022, compared to $127 million during the same period in fiscal 2021. Adjusted EBIT was $73 million for Q3 FY22, compared to $127 million in Q3 FY21.

Nordstrom, Inc ended the third quarter with $993 million in available liquidity, including $293 million in cash.

For the Nordstrom banner, net sales decreased 3.4 per cent and GMV decreased 2.9 per cent compared with the same period in fiscal 2021. For the Nordstrom Rack banner, net sales decreased 1.9 per cent compared with the same period in fiscal 2021.

The company reaffirmed the financial expectations for fiscal 2022, for which the EBIT margin, as per cent of sales, is estimated to be around 4.1–4.4 per cent. For fiscal 2022, the adjusted EBIT margin is expected to be around 4.3–4.7 per cent, while the EPS, excluding the impact of share repurchase activity, if any, is expected to be $2.13–$2.43.

Fibre2Fashion News Desk (DP)