Department store chain Nordstrom has experienced a notable decline in net earnings during the third quarter (Q3) of the fiscal year 2024 (FY24), with figures dropping to $46m compared to $67m in the same period of FY23.
Its earnings per diluted share (EPS) also decreased to $0.27 from $0.41 in Q3 FY23.
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For the third quarter ended 2 November 2024, net sales saw an uplift, reaching $3.34bn, a 4.6% increase from $3.20bn in Q3 FY23.
The retailer’s comparable sales rose by 4% compared to fiscal 2023, with the Nordstrom banner seeing a 1.3% increase and the Nordstrom Rack banner experiencing a significant 10.6% rise in net sales.
Digital sales also grew by 6.4% in Q3 FY24, accounting for 34% of total sales during the quarter.
Nordstrom’s gross profit as a percentage of net sales improved slightly to 35.6%, up from 35% in the same period of the last fiscal year, primarily due to robust regular price sales.
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By GlobalDataHowever, earnings before interest and taxes (EBIT) dropped to $83m from $102m during the same period in fiscal 2023.
The company faced increased selling, general and administrative expenses, which rose to 36.6% of net sales from 36.3%, largely due to higher labour costs and charges related to accelerated technology depreciation.
Nordstrom CEO Erik Nordstrom stated: “The continued sales growth across the company and strong gross margin in the third quarter indicate our team’s focus and efforts are working.
“Our customers have a lot of choices, and our results encourage us that we’re on the right path. Looking ahead, we’ll continue to improve our shopping experience as we strive to maintain the positive momentum we’ve worked towards all year.”
Nordstrom provided its financial outlook for fiscal 2024, forecasting flat to 1% growth in revenue range, including retail sales and credit card revenues, compared with the 53-week fiscal year 2023.
Comparable sales are expected to grow between 1% and 2% versus 52 weeks in fiscal 2023, with projected EPS ranging from $1.40 to $1.70.
In September 2024, Nordstrom‘s board of directors’ special committee acknowledged a proposal from the company’s founding family members to privatise the department store.
