US retailer Nordstrom's net sales surge 3.4% to $3.78 bn in Q2 FY24

Nordstrom, Inc, a leading fashion retailer in the US, has reported a 3.4 per cent year-on-year (YoY) increase in net sales to $3.785 billion for the second quarter of fiscal 2024 (Q2 FY24), with comparable sales up by 1.9 per cent compared to the same period last year. Gross Merchandise Value (GMV) also saw a 3.5 per cent increase.

The company reported net earnings of $122 million for the quarter, equating to earnings per diluted share (EPS) of $0.72. Despite the increase in net sales, earnings before interest and taxes (EBIT) were slightly down, at $190 million compared to $192 million in the second quarter of fiscal 2023. However, the adjusted EBIT stood at $244 million, excluding a charge primarily related to supply chain asset impairment, the company said in a press release.

The Nordstrom banner, which includes both Nordstrom's full-line stores and its online platform, saw a modest increase of 0.9 per cent in both net sales and comparable sales. GMV for the banner grew by 1.1 per cent.

Nordstrom Rack, the company's off-price retail division, performed particularly well, with net sales up by 8.8 per cent and comparable sales rising by 4.1 per cent compared to the same quarter in fiscal 2023.

Nordstrom's digital sales continued to grow, with a 6.2 per cent increase compared to the same period last year. Digital sales now represent 37 per cent of total sales for the quarter.

The company also reported an 8.3 per cent increase in ending inventory compared to the same period in fiscal 2023. This inventory growth outpaced the 3.4 per cent increase in sales, potentially signalling an anticipation of future demand or strategic stockpiling.

Gross profit as a percentage of net sales rose to 36.6 per cent, up by 155 basis points compared to the second quarter of fiscal 2023. However, selling, general, and administrative expenses as a percentage of net sales also increased, reaching 34.4 per cent, up by 160 basis points from the same period last year.

"Our second quarter results were solid, and we're encouraged by the continued topline strength in both banners and the progress we're making to expand gross margin and increase profitability," said Erik Nordstrom, chief executive officer of Nordstrom. "We're confident in our outlook for the remainder of the year and look forward to sustaining the momentum we've built as we execute on our 2024 priorities."

Fibre2Fashion News Desk (DP)