Nordstrom (JWN) 2020 Q4 Results Above Expectations

Nordstrom Inc. (NYSE:JWN) initially started operating as a small shoe store in Seattle in 1901. The company, founded by John W. Nordstrom and Carl F. Wallin, grew over time and became a leading shoe store chain in the United States. Nordstrom started adding new items, such as clothing, to its product portfolio in the late twentieth century. Today, it is a leading fashion retailer offering a variety of high-quality shoes, apparel, and accessories.

Nordstrom, being a nonessential retailer, was hit hard by the Covid-19 pandemic during the last year. The company had to close its stores during the peak of the crises that negatively impacted its sales. JWN stock value fell more than 20 percent during 2020.

Nevertheless, the company’s sales improved during the fourth quarter, helping it to beat analysts’ expectations. Nordstrom on Tuesday reported earnings of 21 cents per share for the three months ended January 30, as compared to $1.23 in the year-ago quarter. Analysts on average were expecting Nordstrom to report earnings of 16 cents per share.

Revenue came in at $3.65 billion, down 19.7 percent from the comparable quarter of 2019, but above the consensus forecast of $3.60 billion. Revenue at Nordstrom Rack declined 23 percent during the quarter. On the bright side, digital sales in the quarter reached $2 billion, accounting for 54 percent of the total sales.

CEO of Nordstrom, Erik Nordstrom expressed his satisfaction over Q4 results. He said in a statement, “We’re proud of our team’s efforts to generate another quarter of improved sales trends and positive operating cash flow in what remains an uncertain environment. Heading into 2021, we’re taking steps to improve our inventory position.”

Looking forward, the company expects its revenue to grow over 25 percent in the first quarter. Nordstrom shares fell more than 3 percent on Wednesday despite reporting better-than-expected results for Q4.

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