Nordstrom sees muted revenue, comparable sales in current year

Nordstrom Inc. is forecasting muted revenue and comparable sales growth this year as sluggish demand at its high-end namesake stores offsets an improving outlook at its off-price Rack stores. 

The department-store operator said on Tuesday it has plans to open more than two dozen Rack locations within the next year or so, including in San Diego, Omaha and Houston, while also boosting online sales at the Nordstrom banner. 

“We’re laser-focused on efforts we know will drive growth and profitability across the business over the next few years,” Chief Executive Officer Erik Nordstrom said in a statement. 

Nordstrom sees revenue this fiscal year in a range of negative 2% to up 1% versus the previous 12 months. The Seattle-based retailer expects earnings per share to be $1.65 to $2.05. The forecasts include a small impact from an extra week in the previous fiscal year versus the current one. 

In the fourth quarter, the Nordstrom brand’s revenue fell 3% to $2.87 billion, below analysts’ average estimate. Revenue at the off-price Rack, meanwhile, surged 15% to $1.43 billion, outpacing expectations. 

Executives have been working to attract more shoppers to Rack stores by pivoting back to its tried-and-tested strategy of selling high-end items on discount after some pandemic-era missteps. Despite the improvement, competitors such as TJX Cos have fared better with a more consistent, low-priced selection of merchandise.