Published - May 25, 2022 @ 3:39 PM (EET)
On Tuesday, Nordstrom (NYSE:JWN) raised its forecast for earnings and revenue for the coming year ahead of analysts' expectations, sending shares up nearly 10% in premarket trading Wednesday.
The luxury department store chain now expects revenue for fiscal 2023, including credit card sales, to increase between 6% to 8%, compared with a previous range of up 5% to 7%.
During the fiscal quarter ended 30 April, net sales increased almost 19% to $3.47 billion, above analysts' average estimates of $3.27 billion.
Nordstrom's high-end banner stores saw sales jump 23.5%, topping pre-pandemic levels, while digital sales were flat year-over-year, indicating the appetite for shoppers to get out of their homes and visit stores.
The optimistic outlook and results reflect the contrast between retailers catering to high-end clients and those selling to mass-market shoppers like Target (NYSE:TGT), Kohl's (NYSE:KSS), and Walmart (NYSE:WMT).
"At this point, we have not seen inflationary cost pressures adversely impact customer spending, which we believe is due to the higher income profile and resiliency of our customer base." - Chief Financial Officer Anne Bramman.
Cash generated from operating activities came in at $187 million in the first quarter, compared to cash used of $364 million a year ago. As of 30 April 2022, Nordstrom held cash and cash equivalent of $484 million.
DIVIDEND & BUYBACK: The board declared a quarterly cash dividend of $0.19 per share to be paid to shareholders of record at the close of business on 31 May 2022, payable on 15 June 2022.
Concurrently, the firm announced a $500 million share repurchase program.
Nordstrom also announced Tuesday, that it plans to launch its Trunk Club business, a personal styling platform that it acquired in 2014, and will soon start to sell shoes online from Allbird.
Nordstrom will become one of the few third-party retail partners of the sustainable sneaker brand, which went public last year.
Following the announcement, shares of Allbirds (NASDAQ:BIRD) rose in late trading.
