During the quarter, net sales for the Nordstrom banner increased by 23.5% and GMV by 24.8%. Nordstrom Rack net sales increased 10.3% and continued to show sequential improvement over pre-pandemic sales levels, the company said in its first quarter 2022 earnings report.
Digital sales were flat compared to the same period in fiscal 2021 as customers increasingly opted to shop in-store. Digital sales accounted for 39% of total sales in the quarter.
U.S. luxury retail chain Nordstrom, Inc. reported first quarter (Q1) net income of $20 million and earnings per diluted share (EPS) of $0.13 for the three months ended April 30, 2022. Its net sales increased by 18.7% compared to the same period. in fiscal 2021, surpassing pre-pandemic sales levels, and gross merchandise value (GMV) increased 19.6%.
Gross profit, as a percentage of net sales, of 32.8% increased 190 basis points from the same period in fiscal 2021 due to leverage on purchasing costs and occupancy and improved merchandise margins through favorable pricing effects and lower shrinkage rates.
Closing inventories increased 23.7% compared to the same period in fiscal 2021, compared to an 18.7% increase in sales.
Selling, general and administrative expenses, as a percentage of net sales, of 33.6%, decreased by 320 basis points compared to the same period of fiscal 2021, mainly due to leverage on the increase in sales.
Additionally, first quarter EPS was negatively impacted by $0.05 due to discrete tax charges, primarily related to stock-based compensation, which increased the quarterly effective tax rate by 19.3 % of pre-tax profit. The company continues to expect a full year tax rate of approximately 27%.
“Our focus on serving the customer through our interconnected model with Nordstrom and Nordstrom Rack, a scaled digital platform and a strong store fleet has positioned us to capitalize on demand from customers who have shopped for long-awaited occasions and refreshed their closets,” said Erik Nordstrom, CEO of Nordstrom, Inc. “In the first quarter, we delivered strong revenue growth with broad-based improvement across key categories and geographies. Importantly, we have made progress on our strategic initiatives and continue to focus on increasing profitability on our way to achieving our financial goals.”
In the first quarter, basic categories including men’s and women’s apparel, footwear and designer saw the strongest growth over 2021 as customers refreshed their wardrobes for occasions such as events. social events, trips and returns to the office. Improvements were widespread across all regions, with urban stores seeing the strongest growth. Merchandise margins improved due to favorable pricing effects and lower shrinkage rates.
“Customers remain at the center of everything we do, and we continue to provide them with expanded and relevant choices and the differentiated service they expect from us, consistent with our commitment to get closer to you,” said Pete Nordstrom, President and Chief Brand Officer of Nordstrom, Inc. “We are pleased with the momentum we are seeing in the business and excited about our plans for the upcoming anniversary sale. Looking ahead, we are committed to further improve merchandise margin and increase productivity of the supply chain, in order to generate additional profitability while continuing to improve the customer experience.”
As previously announced on May 18, 2022, the Board of Directors declared a quarterly cash dividend of $0.19 per share to be paid to shareholders of record at the close of business on May 31, 2022, payable June 15, 2022. The Board The directors also authorized a new $500 million share buyback program on May 18, 2022.
Fibre2Fashion (KD) News Desk