Forecasts and expectations for its annual revenues and profits have been raised by Nordstrom Inc as the company cited demand for its goods from affluent consumers to be the key factor in overcoming decades of rising inflation. this upbeat forecast sent the stocks of the company by 11 per cent in extended trade.
In the first quarter, net sales at Nordstrom’s banner stores surpassed pre-pandemic levels by 23.5 per cent, as Americans returned to work and social gatherings and purchased designer apparel and footwear.
“At this point, we have not seen inflationary cost pressures adversely impact customer spending which we believe is due to the higher income profile and resiliency of our customer base,” Chief Financial Officer Anne Bramman said in a post-earnings call.
Ralph Lauren, the luxury store, has also predicted increased full-year profits.
Nordstrom and Ralph Lauren’s upbeat outlook contrasted sharply with peer Kohl’s and big-box retailers Walmart Inc and Target Corp, which have suffered as consumer spending has been squeezed by rising prices.
Nordstrom raised prices during the quarter to address growing costs, yet demand has remained strong, according to the company.
Increased footfall and higher stock levels helped Nordstrom Rack’s off-price section rise by 10.3 per cent.
Nordstrom predicted revenue growth of 6 per cent to 8 per cent in fiscal 2022, up from a previous prediction of 5 per cent to 7 per cent.
The adjusted profit per share for the whole year is estimated to be between $3.38 and $3.68, up from $3.15 to $3.50 previously.
According to Refinitiv IBES, total revenue increased 18.7% to $3.57 billion in the first quarter, exceeding analysts’ expectations of $3.28 billion.
On an adjusted basis, the retailer lost 1 cent per share, compared to projections of a loss of 5 cents.
(Adapted from EconhomicTimes.com)