Nordstrom (JWN) Q1 2024 earnings

Nordstrom on Thursday fell short of Wall Street’s quarterly earnings expectations as its off-price chain Rack outperformed the rest of its stores.

Despite the earnings miss, the Seattle-based department store operator posted sales growth and stuck by its full-year forecast.

Here is what the retailer reported for its fiscal first quarter compared to what Wall Street was expecting, based on a survey of analysts by LSEG:

• Loss per share: 24 cents vs. 8 cents expected
• Revenue: $3.34 billion vs. $3.20 billion expected

Nordstrom shares slid about 7% in extended trading.

Nordstrom has leaned on its off-price chain, Nordstrom Rack, to drive growth. It has been opening more Rack stores, including nine during the quarter. It is on track to open a total of 22 new Rack stores this year.

Yet, Rack, which offers brand names at cheaper prices, has lagged behind rivals such as TJX-owned T.J. Maxx and Marshalls.

In the quarter, however, the off-price chain showed signs of progress. It outperformed Nordstrom’s flagship brand with comparable sales rising 7.9% year over year. Comparable sales for the company’s flagship brand climbed 1.8%.

The retailer reaffirmed that it expects earnings of $1.65 to $2.05 for the full fiscal year. Nordstrom anticipates full-year revenue will be in a range of a 2% decline to 1% growth from the prior year.

For its fiscal first quarter, Nordstrom posted a net loss of $39 million, versus a net loss of $205 million in the prior-year period. The company’s total revenue rose to $3.34 billion from $3.18 billion in the previous year.

Sales of activewear led the company’s performance in the quarter with double-digit growth, as customers bought clothing and shoes from brands including Adidas, Vuori and Hoka, President Pete Nordstrom said on the company’s earnings call.

Kids’ and women’s apparel also had double-digit growth and beauty sales increased by high single digits, the company said.

The results come as the Nordstrom family again considers taking the company private. Last month, it said it formed a special committee to evaluate bids.

The company’s quarterly results Thursday were the first since former chairman Bruce Nordstrom, the father of CEO Erik Nordstrom and Pete Nordstrom, died earlier this month.

Nordstrom, similar to its department store rivals, is trying to win over young consumers as it relies on aging customers.