Nordstrom, the upscale fashion retailer, has impressed investors with its strong full-year projections, leading to a remarkable 38% increase in its shares during extended trading. The company’s forecast for revenue and profit exceeded expectations, signaling a significant demand for its high-end apparel and footwear as Americans are slowly returning to their normal lives. This positive outlook has alleviated concerns among investors who were worried about Nordstrom’s performance, particularly after experiencing a 28% decline in shares in 2021.

During the fourth quarter, Nordstrom saw a notable 23% increase in total revenue, reaching $4.49 billion, surpassing the estimated $4.35 billion. This growth comes after the company faced criticism from Wall Street analysts last year due to the underwhelming performance of its off-price Rack division and the insufficient inventory in its stores. To address these concerns, Nordstrom’s CEO, Erik Nordstrom, emphasized that their main focus is on enhancing the performance of Nordstrom Rack, increasing profitability, and optimizing their supply chain and inventory flow.

Despite the challenges posed by global supply chain disruptions and shipping logjams, Nordstrom remains optimistic. The company reported that its inventory levels at the end of the fourth quarter were higher than planned but expects to reduce them in relation to sales during the current quarter. Furthermore, Nordstrom plans to return cash to its shareholders in the first quarter after suspending quarterly dividends and share repurchases in 2020 to navigate through the difficulties caused by the pandemic.

Looking ahead, Nordstrom has projected a rise in its fiscal 2022 revenue between 5% and 7%, surpassing the average analyst forecast of 3.66% growth. Additionally, it estimates earnings per share, excluding the impact of potential share repurchases, to be between $3.15 and $3.50, well above the analysts’ average expectation of $2.01 per share.

Nordstrom’s positive outlook is consistent with that of its larger competitors, Kohl’s Corp and Macy’s Inc, both of whom have also predicted better-than-expected sales and profits for 2022. This suggests an overall optimistic outlook for the retail industry as the economy continues to recover from the repercussions of the pandemic.

In conclusion, Nordstrom’s robust full-year projections have heightened investor confidence and significantly boosted its shares. The company’s commitment to improving performance, increasing profitability, and optimizing supply chain operations has yielded better-than-anticipated financial results. With the intention of returning cash to its shareholders and exceeding analyst forecasts, Nordstrom solidifies its position as a strong contender in the high-end fashion market.

Useful links:
Forbes: Nordstrom Sales & Earnings Outlook Beat Estimates, Shares Surge
Reuters: Nordstrom forecasts sturdy 2022 revenue, profit; shares soar 38%