Nordstrom’s net sales fell 20% in its November-through-January fourth quarter as the winter wave of the coronavirus pandemic roiled the nation’s economy, but the overall drop was cushioned by the retailer’s digital sales, which increased 24% year-over-year to account for more than half of the total.
The Seattle-based company said Tuesday its quarterly net revenues were $3.64 billion, down $893 million from the same period in fiscal 2019. Profit for the usually robust holiday quarter was a slender $33 million, or 21 cents per share, compared with $193 million, or $1.21 per share, a year earlier.
For the year, during which many of its stores were closed for extended periods because of the pandemic, Nordstrom reported net revenues of $10.7 billion, down 31% from $15.1 billion the prior year. The company posted a loss of $690 million for the year, compared with $496 million in profit in fiscal 2019.
The company said COVID-19 related charges — including asset impairments from store closures, premium pay and benefits, and restructuring charges, “slightly offset by credits” from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) — reduced its annual profit by $192 million, or $1.22 per share.
Executives said the company experienced delays in receiving inventory, which left it holding more than expected going into the end of its fiscal year. But they promised “actions to significantly reduce inventory levels in first quarter 2021” — perhaps a nod to the Nordstrom Rack division.
The one bright spot in the company’s yearly results was its digital platform. While the mainline Nordstrom stores saw sales fall 29.6% for the year and Nordstrom Rack dropped 35.3%, digital sales grew to 55% of the total.
Erik Nordstrom — named the company’s sole CEO exactly a year ago, ending an unusual arrangement where he’d shared the title with his brothers — said “aggressive actions” had helped the company remain financially strong during the economic turmoil. He added, “We’re confident in our ability to successfully emerge from this pandemic in a stronger position than before.”
Assuming its stores can stay open during 2021, the company said, it projects revenue to grow more than 25%. Digital revenue is expected to remain above 50% of its total sales — an indication that even once the pandemic is behind us, shopping patterns that were already shifting before COVID-19 may be altered for the long term.
Nordstrom shares, which fell 1% in trading before the earnings news, later dropped $1.01, or 2.7%, to $36.57 in after-hours trading.