Nordstrom Rack sales grow as shoppers seek discounts, giving hope to Seattle-based company
Aug 28, 2024, 2:06 PM | Updated: Oct 8, 2024, 10:49 am
A Nordstrom Rack store. (Photo: Phillip Pessar via Flickr Creative Commons)
(Photo: Phillip Pessar via Flickr Creative Commons)
It appears customers have been doing some back-to-school shopping. Sales are looking positive for Seattle-based Nordstrom, Inc., specifically the company’s discount store Nordstrom Rack.
According to a press release from the company on Tuesday, Nordstrom Rack’s net sales went up nearly 9% during the second quarter of 2024. Comparable sales grew 4.1% compared to the same fiscal period last year.
The quarter started on May 5 and ended Aug. 3. Total company net sales increased 3.4%.
“Our second quarter results were solid, and we’re encouraged by the continued topline strength in both banners and the progress we’re making to expand gross margin and increase profitability,” Erik Nordstrom, chief executive officer of Nordstrom, Inc. said via the release. “We’re confident in our outlook for the remainder of the year and look forward to sustaining the momentum we’ve built as we execute on our 2024 priorities.”
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BNN Bloomberg points to high inflation and interest rates driving customers to look for discounts. According to the media outlet, similar results have been seen at TJX Cos Inc., Ross Stores Inc. and Target Corp.
Nordstrom credited its Anniversary Sale for the higher numbers. The company noted in the second quarter, active, women’s apparel, beauty and kids saw the strongest growth compared to last year.
“We’re pleased with the Anniversary Sale and the enthusiastic response from our loyal customers,” Pete Nordstrom, President of Nordstrom, Inc., said via the release. “They were highly engaged throughout the event and responded favorably to our assortment, experiences and service. We appreciate our team’s continued efforts to help our customers feel good and look their best.”
However, Nordstrom executives are staying cautious, according to MarketWatch.
“The environment does remain uncertain, and we’ve got a really big part of the back half of the year, as with all retailers,” Chief Financial Officer Cathy Smith told MarketWatch. “Two-thirds of our profits typically come in the second half, and we’re just being thoughtful around that.”
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MarketWatch reported the company decided to stop building an “omnichannel center” in the Pacific Northwest.
“We found that we can serve West Coast customers more efficiently from our existing supply-chain network while avoiding additional costs to build out the facility,” Erik Nordstrom, the CEO of Nordstrom and brother to Pete, told MarketWatch.
The media outlet added that Nordstrom is incorporating RFID technology to track its clothing backlogs and using more AI concerning its data.
According to the company, the board of directors declared a quarterly cash dividend of $0.19 per share, payable on September 18, 2024, to shareholders of record at the close of business on September 3, 2024.
Julia Dallas is a content editor at MyNorthwest. You can read her stories here. Follow Julia on X here and email her here.
