While the company posted net earnings of $119 million and an EBIT margin of 4.5 per cent in the fourth quarter (Q4) of FY22, it saw a 4.1 per cent decline in total net sales compared to the same period in the previous year. Nordstrom’s digital sales also took a hit, decreasing 13.1 per cent year-on-year (YoY) due to the elimination of store fulfilment for Nordstrom Rack digital orders and the sunsetting of Trunk Club earlier in the year, the company said in a press release.
Nordstrom, a leading fashion retailer in the US, has reported net earnings of $245 million in fiscal 2022 (FY22), compared to $178 million in FY21. The company’s diluted earnings per share in FY22 was $1.51, with EBIT of $465 million, or 3.1 per cent of sales. Adjusted EBIT was $502 million, or 3.3 per cent of sales, and adjusted EPS was $1.69 for FY22.
In Q4 FY22, gross profit, as a percentage of net sales, of 33.2 per cent decreased 525 basis points compared with the same period in FY21, primarily due to higher markdown rates, as the company prioritised rightsizing inventory levels in a highly promotional environment. furthermore, the EBIT was $187 million in the fourth quarter of FY22, compared with $299 million during the same period in fiscal 2021. Ending inventory decreased 15.2 per cent compared with the same period in fiscal FY21, versus a 4.1 per cent decrease in sales.
Selling, general and administrative expenses, as a percentage of net sales, of 31.5 per cent decreased 240 basis points in Q4 FY22 compared to Q4 FY21, primarily due to supply chain expense efficiencies.
For FY23, the company expects a revenue decline of 4 to 6 per cent, including an approximately 250 basis point negative impact from the wind-down of Canadian operations, and an approximately 130 basis point positive impact from the 53rd week. Nordstrom also forecasts an EBIT margin of 1.2 to 2.1 per cent of sales, and an adjusted EBIT margin (excluding charges related to the wind-down of Canadian operations) of 3.7 to 4.2 per cent of sales. EPS is expected to be in the range of $0.20 to $0.80.
“We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty. We also made the difficult decision to wind down operations in our Canadian business. This will enable us to simplify our operations and further increase our focus on driving long-term profitable growth in our core US business,” said Erik Nordstrom, chief executive officer of Nordstrom, Inc. “As we enter fiscal 2023, we are focused on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity, and continuing to advance our supply chain optimisation initiatives. We remain confident in the strength of our brands and our ability to drive profitable growth and deliver long-term value to our shareholders.”
Fibre2Fashion News Desk (DP)