Nordstrom Q2 revenue rises on boost from sales event, shares jump

(Adds details from prepared remarks in paragraph 3 – 7)
By Savyata Mishra
Aug 27 (Reuters) – Nordstrom posted a second-quarter profit that topped estimates on Tuesday, with sales propped up by its crucial Anniversary Sale event, sending its shares up nearly 6% after the bell.
The upmarket department store chain also slightly revised its annual comparable sales forecast, raising the lower end to a range of flat to 2% growth, up from its previous projection of a 1% decline to 2% growth.
The Seattle, Washington-based company is attempting to revitalize its business by focusing on high-demand categories like women’s apparel to counteract a slowdown in demand and boost its margins.
“Anniversary Sales were driven by newness and fall fashion… including our Nordstrom private brands,” President Pete Nordstrom said.
The event, which ran from July 15 through Aug. 4 this year, saw strong demand for sportswear apparel brands including On Holding, New Balance, and Vuori.
Nordstrom said it saw solid demand at the Rack, its off-price brand and will launch 12 additional Rack locations in the country before the holiday shopping season begins.
Affluent shoppers continue to spend, albeit at a slower pace, benefiting apparel chains such as Abercrombie & Fitch and Gap.
In contrast, rival Macy’s
lowered
its annual net sales forecast last week, blaming higher promotions and weaker demand.
Nordstrom’s shares have declined approximately 3% over the past month. Analysts cited muted demand during the sale period, with Placer.ai foot traffic data suggesting July was the quarter’s weakest month.
The stock is up about 16% this year compared with a roughly 18% rise in the broader S&P 500 index.
Total revenue at the company rose 3.2% to $3.89 billion in the quarter ended Aug. 3, from $3.77 billion a year earlier, almost in line with analysts’ average expectation of $3.90 billion, according to LSEG data.
On an adjusted basis, the company reported a profit of 96 cents per share, compared to 71 cents analysts had expected. (Reporting by Savyata Mishra in Bengaluru; Editing by Tasim Zahid)