Nordstrom Inc. (JWN) reported a surprise profit for the first quarter of fiscal 2023, as the retailer benefited from easing inventory woes and strong demand from wealthy shoppers.
The Seattle-based company earned 7 cents per share, excluding items, on revenue of $3.18 billion. Analysts surveyed by Refinitiv IBES were expecting a loss of 13 cents per share on revenue of $3.12 billion.
Nordstrom's results were helped by a 110 basis point improvement in gross margin, which was driven by easing cost pressures and tighter inventory management. The company's inventory decreased 7.8% at quarter-end.
Nordstrom's results also benefited from strong demand from wealthy shoppers. The company's full-price business saw comparable sales increase 12.7%, while its off-price business saw comparable sales increase 11.9%.
Nordstrom's results were a bright spot in an otherwise gloomy retail landscape. Many retailers have been struggling with rising inflation, supply chain disruptions, and the ongoing war in Ukraine.
Nordstrom's CEO, Erik Nordstrom, said in a statement that the company is "confident in our ability to continue to deliver strong results in the quarters ahead."
Analysis
Nordstrom's surprise profit is a positive sign for the retail industry. The company's results suggest that wealthy shoppers are still willing to spend money on luxury goods, even in the face of rising inflation.
Nordstrom's results are also a positive sign for the off-price sector. The company's off-price business saw comparable sales increase 11.9%, which was faster than the growth of its full-price business. This suggests that consumers are still looking for value, even when they are shopping for luxury goods.
Nordstrom's results are a reminder that there are still some bright spots in the retail industry. The company's success is a testament to its focus on luxury goods and its ability to manage its inventory effectively.
Nordstrom's results are also a positive sign for the future of the retail industry. The company's success suggests that there is still a demand for brick-and-mortar stores, even in the age of e-commerce.
Nordstrom is well-positioned to continue to succeed in the years to come. The company has a strong brand, a loyal customer base, and a focus on luxury goods. Nordstrom is also a leader in the off-price sector, which is a growing segment of the retail industry.