Shares of the company, which surged about 33% so far this year, fell 1% in extended trading.
“While we continue to be pleased with our year-to-date results, the external environment remains uncertain,” Chief Financial Officer Cathy Smith said in prepared remarks.
At the end of the third quarter, inventory grew 6%, outpacing sales growth of 5%. The increase was partly due to slower sales in seasonal categories like boots, sweaters and outerwear in certain regions, said the company’s President Pete Nordstrom (NYSE:JWN), adding that they have curated sweaters and luxury fragrances for holidays.
The slowing sales trends seen by Nordstrom in late October could indicate “that the holiday outlook is not great,” said Morningstar analyst David Swartz.
However, the company beat third-quarter revenue and profit estimates on the back of popular brands including On Running, Hoka and Vuori.
Nordstrom’s addition of sought-after brands, along with its focus on digital growth and expanding stores of its off-price brand Rack, has boosted sales ahead of a potentially mixed holiday season.
The company expects annual comparable sales growth of 1% to 2%, from prior forecast of flat to a 2% rise.
It bucked the trend on tepid spending at department stores by luring in shoppers for categories including women’s apparel, shoes and men’s apparel, while peers such as Macy’s (NYSE:M) and Kohl’s (NYSE:KSS) struggled with patchy demand.
Its total revenue of $3.46 billion in the quarter ended Nov. 2, topped analysts’ estimates of $3.35 billion, according to data compiled by LSEG.
Benefits from strong full-price sales and improvements in variable costs across the business helped expand quarterly gross profit by 60 basis points to 35.6%. Adjusted profit of 33 cents per share beat analysts’ estimates of 21 cents.
Source: Economy - investing.com
