As demand from affluent customers offset a general slowdown in spending on clothing and accessories caused by inflation, Nordstrom Inc., outperformed market expectations for first-quarter revenues.
The upscale department store chain reported a 110-basis-point gain in quarterly gross margins due to easing cost pressures and tighter inventory management. The firm also maintained its expectations for 2023 sales and adjusted profit.
Because of return-to-office fashions and other social engagements, wealthy Americans are still spending money on clothing. Additionally, businesses have increased discounts and promotions to get rid of extra inventory.
Nordstrom has been building additional stores under the Rack off-price brand in an effort to draw in more money-conscious customers.
Although Rack’s quarterly sales fell by 11.9 per cent, Nordstrom reported that trends improved later in the quarter as a result of its decisions to stock its shelves with well-liked brands.
Inventory at the company dropped 7.8 per cent at the quarter’s end, with men’s clothing, activewear, and cosmetic products doing well in the three months that concluded on April 29.
Following cautious predictions for the year from businesses ranging from Target Corp to Home Depot Inc., Nordstrom has joined clothing retailer Abercrombie & Fitch Co., in defying a general retail downturn.
From US $ 3.57 billion a year earlier, the company’s total sales decreased to US $ 3.18 billion in the quarter. Refinitiv IBES data showed that US $ 3.12 billion was the average analyst expectation.
