What happened
Week to date, shares of Nordstrom were up 19.8% as of 11:29 a.m. ET on Friday, according to data provided by S&P Global Market Intelligence. Department stores had a good week, as noted by strong results from Nordstrom (JWN 0.88%) and Macy's. The former reported stellar sales growth of 19% year over year.
So what
After the last two weeks of earnings reports from top retailers, the wheat has separated from the chaff. In the prior week, Walmart and Target got hammered over weak earnings results. This week, however, results from Nordstrom showed that there is spending velocity happening in the economy, but only in certain categories, including clothing for the return to the office and going out with friends.
"We're pleased with the momentum we're seeing in the business and excited about our plans for the upcoming Anniversary Sale," Chief Brand Officer Pete Nordstrom said. Near-term sales visibility looks healthy, as management reported that customers are shopping for "long anticipated in-person occasions, such as social events, travel, and return to office."
Image source: Getty Images.
Now what
The company's off-price channel Nordstrom Rack saw sales increase by 10% year over year. Management sees opportunity to further drive growth here as they make more brands available from the full-price Nordstrom store.
Management expects full-year revenue to grow 6% to 8% year over year, with adjusted operating margin of approximately 5.6% to 6%. Analysts currently expect sales to increase in line with management's forecast, with adjusted earnings per share improving to $6.14 for the year, up from $5.61 last year.
