Shoppers enter a Nordstrom department store in Austin, Texas on March 3, 2023.
Brandon Bell | Getty Images
Nordstrom raised its full-year sales forecast on Friday after holiday shopping at its stores and on its website came in stronger than the department store's cautious expectations.
Despite the higher sales forecast, the company stuck to its profit forecast.
The Seattle-based retailer said it now expects full-year sales growth of 1.5 percent to 2.5 percent, which includes the effect of one less fiscal year Week. This compares to the previous forecast of unchanged to 1%.
Nordstrom struck a conservative tone with its outlook in late November, even though the company beat Wall Street's expectations for fiscal third-quarter sales. Sales growth of up to 1% was forecast for the year as a whole. It said adjusted annual profit would be between $1.75 and $2.05 per share. Revenue includes retail sales and credit card revenue.
CEO Erik Nordstrom said in an earnings call at the time that the company had seen “a noticeable decline in sales trends toward the end of October” and factored that into his guidance.
But in a press release Friday, he attributed the better-than-expected holiday sales to the company's “efforts to remain competitive in the advertising environment and the strength of our offering.”
Nordstrom said net sales rose 4.9% and comparable sales, a measure that takes into account the impact of store openings and closings, were up 4.9% in the nine-week holiday period that ended Jan. 4, compared with the same quarter last year ended December, up 5.8%. 30.
During the holidays, the Nordstrom banner's net sales rose 3.7% and comparable sales rose 6.5%. At Nordstrom Rack, the company's off-price banner, net sales rose 7.4% and comparable sales rose 4.3%.
The department store operator's results offer investors further insight into monitoring the health of U.S. consumers and retailers' performance during the key shopping season. Retailers including Walmart, Best Buy, Macy's and others will report earnings starting in late February.
So far, the early holiday numbers have looked promising. According to Adobe Analytics, online spending in the U.S. increased nearly 9% from November 1 to December 31 compared to the same period last year, totaling $241.4 billion. According to Mastercard SpendingPulse, which measures in-store and online sales across all payment types, U.S. holiday retail sales (excluding automotive sales) increased 3.8% year-over-year from November 1 to December 24 .
Nordstrom's update comes as the founding family prepares to take the retailer private. Nordstrom announced a buyout deal with the family and Mexican department store El Puerto de Liverpool in late December worth about $6.25 billion. The transaction, approved by the company's board of directors, is expected to close in the first half of 2025.
Shares of Nordstrom closed at $24.01, down about 4% from their 52-week high. The company is scheduled to report its full fourth-quarter and full-year results on March 4.
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