This downturn was primarily due to the wind-down of the company’s Canadian operations, which negatively affected total company net sales by 175 basis points. The first quarter of FY23 only included one month of sales from Canadian operations, in contrast to a full quarter of sales in the first quarter of FY22.
Nordstrom’s Q1 FY23 net sales fell 11.6 per cent to $3.064 billion, influenced by winding down Canadian operations.
Nordstrom and Rack banners also saw sales decrease.
Digital sales dropped 17.4 per cent, representing 36 per cent of total sales in Q1 FY23.
Gross profit rose by 110 basis points.
Loss before interest and tax was $259 million.
Breaking it down by brand, the Nordstrom banner reported an 11.4-per cent decrease in net sales and an 11.8-per cent drop in GMV. The cessation of Canadian operations contributed negatively by 270 basis points to the Nordstrom banner’s net sales, the company said in a media release.
Meanwhile, the Nordstrom Rack banner saw a decrease in net sales by 11.9 per cent. This downturn was impacted by the elimination of store fulfilment for Nordstrom Rack digital orders during the third quarter of fiscal 2022, which contributed to approximately 600 basis points in the first quarter Rack banner sales decline.
Digital sales decreased by 17.4 per cent in Q1 FY23 compared to the same period in fiscal 2022. Despite this decrease, digital sales accounted for 36 per cent of total sales during the quarter.
Nordstrom’s gross profit as a per centage of net sales increased 110 basis points to 33.8 per cent in Q1 FY23. In line with this, ending inventory decreased by 7.8 per cent compared to the same period in fiscal 2022.
However, selling, general, and administrative expenses as a per centage of net sales increased by 240 basis points to 36 per cent.
Finally, Nordstrom’s loss before interest and tax (EBIT) stood at $259 million in Q1 FY23, compared to an EBIT of $73 million in the same period of fiscal 2022. Adjusted EBIT of $50 million excluded one-time charges of $309 million related to the wind-down of Canadian operations, the release added.
“We are pleased with the progress we’re making against the key priorities we laid out for 2023 as we continue to enhance our overall customer experience, improve Nordstrom Rack performance, increase inventory productivity and optimise our supply chain operations,” said Erik Nordstrom, chief executive officer of Nordstrom. “We’re encouraged by our momentum, especially given the uncertain macroeconomic environment. We remain focused on executing with agility and delivering long-term value to our shareholders.”
Fibre2Fashion News Desk (DP)
