26 August 2020
The Weekly
United States

Nordstrom reported a net loss of $255mn in the second quarter ended Aug. 1, compared to net earnings of $141mn during the same period last year. Losses before interest and taxes came to $370mn, which included pretax charges of $23mn related to COVID-19. In the year-ago period, Nordstrom reported earnings before interest and taxes of $216mn. Revenues came to just over $1.86bn in the last quarter, compared to $3.87bn in the year-ago quarter. Big urban stores, including the Manhattan flagship on 57th Street, have been hardest hit by COVID-19 with bigger traffic drop-offs than other areas of the country.

With “cleaner” inventories and available open-to-buy, inventories are being adjusted to better reflect the demand for casual, active, home and wellness categories. Top-performing merchandise areas last quarter were home, kids’ wear, accessories, beauty and active, in both full-price and off-price channels. Net sales decreased 53% from last year, reflecting temporary store closures for about 50% of days during the quarter due to COVID-19 as well as the shift of the Anniversary Sale, Nordstrom’s biggest event of the year, from the second quarter to the third. During the first quarter, Nordstrom reduced inventory by more than 25% to mitigate markdowns on seasonal inventory and bring in newness for customers. As a result, merchandise margin trends in the second quarter improved sequentially and exceeded expectations. At the full-price department stores, net sales decreased 58%. Excluding the Anniversary Sale event shift impact, full-price sales decreased in the mid-forties percent range. Off-price net sales decreased 43% compared with the same period in fiscal 2019. Total company digital sales decreased 5 %. Excluding the Anniversary Sale event shift impact, digital sales increased about 20% in the second quarter and in the mid-teens range on a year-to-date basis. There was “significant growth” in new Nordstrom customers shopping digitally of more than 50%. Curbside represented one quarter of order pickup volume.