Nordstrom Inc., despite growing signs that Americans are curtailing their spending, reported a positive fourth quarter marked by increased profits and comparable sales gains.
The Seattle-based retailer reported Tuesday that for the period ended Feb. 1, net earnings reached $165 million, or 97 cents per diluted share, compared to earnings of $134 million, or 82 cents per share in the year-ago period.
Companywide, fourth-quarter comparable sales increased 4.7 percent. At the Nordstrom department stores and website comparable sales increased 5.3 percent. At the Nordstrom Rack off-price stores and website, comparable sales increased 3.5 percent.
Net sales in the fourth quarter decreased 2.1 percent to $4.2 billion from $44.3 billion in fiscal 2023, or increased 2.5 percent, excluding about $190 million related to the 53rd week in fiscal 2023.
“Customers responded positively to the strength of our offering across both banners in the fourth quarter,” Erik Nordstrom, chief executive officer of Nordstrom Inc., said in a statement Tuesday. “We maintained the momentum we built throughout the year, which resulted in full-year sales and profitability coming in at the high end of our expectations.”
In the fourth quarter, women’s apparel, active and men’s apparel had the strongest growth versus 2023, the company indicated. For fiscal 2024 overall, women’s apparel, active, men’s apparel, kids and shoes were the strongest.
Erik Nordstrom
Patrick MacLeod/Footwear News
“Our team reacted with agility and speed to the holiday environment, responding in real-time to better serve our customers and drive strong financial results,” said Pete Nordstrom, president of Nordstrom, in his statement. “We consistently executed on our priorities in 2024 and we’re grateful to our teams for their hard work to deliver on our purpose of helping customers feel good and look their best.”
Last December, Nordstrom revealed plans to go private through an agreement whereby the Nordstrom family and Mexican retailer El Puerto de Liverpool would acquire all of the outstanding common shares not already owned by the Nordstroms and Liverpool. Tuesday’s financial report is the last by the Nordstroms in light of their plan to privatize the company.
The deal between Nordstrom and Liverpool is an all-cash transaction with an enterprise value of about $6.25 billion. Nordstrom common shareholders will receive $24.25 in cash for each share of common stock they hold. The deal represents a premium of about 42 percent to the company’s unaffected closing stock price on March 18, which was the last trading day prior to media speculation about the potential transaction. Liverpool will have a 49 percent stake in Nordstrom.
The board has approved the deal and the transaction is expected to close some time during the first half of this year, subject to shareholder approval. A date for the shareholder vote has not yet been announced. Liverpool is often referred to as the Macy’s of Mexico.
Excluding privatization fees and an accelerated technology depreciation charge, the company reported adjusted earnings before interest and taxes of $273 million and adjusted earnings per share of $1.10. That compares to adjusted EBIT of $247 million for the fourth quarter of 2023, which excludes a supply chain asset impairment charge.
Nordstrom also said its chief financial officer Cathy Smith will be leaving soon to become CFO of Starbucks. Her departure will happen following the filing of the company’s annual report for the 2024 fiscal year, anticipated within the next month. A search for a new CFO is underway.
“We are grateful for Cathy’s leadership over the past two years, which has been instrumental in strengthening our financial resilience and flexibility while maintaining our focus on providing customers with the best possible experiences. We wish her well in this next chapter,” said Erik Nordstrom. “We are fortunate to have a strong financial leadership team to take on additional responsibilities and help ensure a smooth transition during our search.”
For the full year, Nordstrom Inc.’s sales reached $14.56 billion, up from $14.22 billion the year before. Net earnings more than doubled to $294 million from $134 million in the year before.
“Nordstrom reported a good fourth quarter as it prepares for its buyout by the Nordstrom family and Mexican department store operator Liverpool,” David Silverman, senior director of Fitch Ratings, commented Tuesday. “Comparable store sales growth across the department store business and the off-price Rack business resulted from the company’s exposure to higher-end consumers at its department stores and recent efforts to revitalize both businesses through merchandise introductions and service improvements, including omnichannel innovations. Fitch expects the company can produce relatively stable results in the medium term given its unique positioning in the department store space, including its exposure to better malls and higher end consumers, its good omnichannel model, and presence in the growing off-price channel.”
Wall Street was lukewarm on the report, as Nordstrom stock was up just 0.12 percent, or 3 cents, to $24.27, as of late Tuesday morning. With its plan to go private, the company did not provide any business forecasts.
Pete Nordstrom
Grant Hindsley
