American fashion retailer Nordstrom's sales climb 23% in Q4FY21

11 Mar '22

3 min read

Pic: Nordstrom

The net sales of Nordstrom, United States-based leading fashion retailer, in the fourth quarter that ended on January 29, 2022, have increased 23 per cent compared with the same period in fiscal 2020. While the company’s net sales decreased 1 per cent compared with the same period in fiscal 2019, consistent with the third quarter of fiscal 2021.

Digital sales in the fourth quarter decreased 1 per cent compared with the same period in fiscal 2020 and increased 23 per cent compared with the same period in fiscal 2019. Digital sales represented 44 per cent of total sales during the quarter and 42 per cent of sales for the fiscal year.

Gross profit, as a percentage of net sales, of 38 per cent increased 500 basis points compared with the same period in fiscal 2020, and increased 340 basis points compared with the same period in 2019, due to improved merchandise margins from reduced markdowns, and increased leverage on buying and occupancy costs, the company said in a press release.

"We advanced our strategic initiatives this quarter, with sequential sales improvement, strong digital growth and a significant increase in profitability," said Erik Nordstrom, chief executive officer of Nordstrom, Inc. "Our team continues to work with urgency to accelerate our progress and invest in our capabilities to better serve customers and profitably grow sales. Our primary focus is on three areas: improving Nordstrom Rack performance, increasing profitability and optimizing our supply chain and inventory flow. Our progress has given us line of sight to achieve in the coming year the financial targets we presented at our 2021 Investor Event."

The company made significant progress on its merchandising strategies throughout 2021, with choice count at an all-time high, increasing 50 per cent over last year, and more than 300 new brands launched during the year. Additionally, alternative vendor partnership models accounted for 10 per cent of Nordstrom banner GMV in the fourth quarter, up from 7 per cent in 2019.

"We drove a significant increase in merchandise margin this quarter, as we engaged customers through our compelling and expanded holiday gift offering, while also reducing promotional activity," said Pete Nordstrom, president and chief brand officer of Nordstrom, Inc. "Looking ahead, we are focused on more effectively balancing inventory with demand while increasing efficiency throughout our network and delivering newness and selection to our customers."

The company continued to navigate global supply chain disruptions throughout the quarter by accelerating receipts and investing in improved in-stock levels. Inventory levels at the end of the quarter were higher than planned, but the company expects to reduce its inventory relative to sales during the first quarter of fiscal 2022.

Fibre2Fashion News Desk (RR)

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