Nordstrom, Inc.

Nordstrom reported Q3 net sales of over $3.3 billion, up 4.6% year over year, with comparable sales up 4%. Nordstrom banner net sales increased 1.3% and comparable sales rose 4.0%, while Nordstrom Rack net sales increased 10.6% and comparable sales increased 3.9%. Gross profit margin expanded 60 basis points to 35.6%, EBIT margin expanded 45 basis points to 2.9%, and EPS was $0.33 versus $0.25 last year. Digital sales grew 6.4% and represented 34% of total sales. For full-year 2024, Nordstrom now expects revenue to be flat to up 1%, total company comparable sales to grow 1% to 2%, EBIT margin of 3.6% to 4.0%, an effective tax rate of about 27%, and EPS of $1.75 to $2.05 excluding share repurchases.

Erik Nordstrom said the customer experience improvements are resonating, pointing to growth in net and comparable sales, margin expansion, and a larger customer base. He emphasized three priorities: growing the Nordstrom banner, improving operations, and building on Rack momentum through new stores, faster fulfillment, and digital enhancements such as search/discovery upgrades and BOPIS at Rack. His tone was positive on Q3 and holiday readiness, but notably more cautious about Q4 after seeing a decline in sales trends toward the end of October.

Cathy Smith highlighted Q3 strength in sales, EBIT, and margins, citing 4.6% net sales growth, 4% comps, 35.6% gross margin, 2.9% EBIT margin, and $0.33 EPS. She said ending inventory was up 5.9% year over year and described the inventory quality as good, though slightly higher than desired, with more inventory needed to support Rack growth and holiday. On capital allocation, she said priorities remain investing in high-return projects, reducing leverage, and returning cash to shareholders; the board also declared a quarterly dividend of $0.19 per share.

Analysts focused on the late-October slowdown, holiday trends, inventory build, Rack growth, margin leverage, and promotional conditions. Management said the slowdown was general across the business, but it was too early to diagnose the cause; they cited weather, the shorter holiday calendar, and election noise as possible factors. On margins, Cathy said top-line growth is the biggest driver of EBIT leverage, while supply chain, technology, and shrink reduction remain key longer-term opportunities. On Rack, management said 20 to 25 new stores per year remains a good modeling assumption and that the chain still has meaningful geographic whitespace.