What happened
Shares of Nordstrom (JWN +0.00%) soared 37.8% on Wednesday after the department store company reported encouraging results for its all-important holiday shopping season.
NYSE: JWN
Key Data Points
So what
Nordstrom's net sales climbed 23% year over year to $4.5 billion in its fiscal fourth quarter, which ended on Jan. 29. The retailer's revenue has almost completely recovered from its pandemic-related downturn.
Sales are also beginning to rebound at Nordstrom Rack. Due to industrywide supply-chain bottlenecks, the company's off-price department store business has struggled to obtain enough inventory. Nordstrom Rack's sales also surged 23% from the year-ago period.
Image source: Getty Images.
"We advanced our strategic initiatives this quarter, with sequential sales improvement, strong digital growth, and a significant increase in profitability," CEO Erik Nordstrom said in a recent press release.
As Nordstrom alluded to, the company's gross margin improved by 5 percentage points to 38%, thanks in part to lower promotional activity. That helped its operating income rise tenfold to $299 million. Its net earnings, in turn, increased sixfold to $200 million, or $1.23 per share.
That was significantly above Wall Street's estimates. Analysts had forecast earnings per share of only $1.02.
Now what
These strong results prompted Nordstrom to issue upbeat guidance for fiscal 2022, including:
- Revenue growth of 5% to 7%.
- Operating margin of 5.6% to 6%.
- Earnings per share of $3.15 to $3.50, representing growth of approximately 200%.
Additionally, management believes Nordstrom will be able to return capital to shareholders beginning in the first quarter. That could come in the form of a resumption in its cash dividend payments, which the company suspended during the early stages of the pandemic.
