Nordstrom, Inc. reported that fourth-quarter total net sales decreased 2.1 percent or increased 2.5 percent, excluding the 53rd week in 2023. Comparable store sales increased 4.7 percent compared with the Q4 period in fiscal 2023. GMV decreased 0.2 percent in the fourth quarter.

In the fourth quarter, active and women’s and men’s apparel reportedly had the strongest growth versus in fourth quarter 2023.

  • Nordstrom banner net sales in the fourth quarter decreased 3.7 percent, or increased 0.5 percent excluding the 53rd week, and comparable sales increased 5.3 percent compared with the same period in fiscal 2023. GMV decreased 1.0 percent in the fourth quarter and increased 0.6 percent in fiscal 2024 when compared with the comparative periods in 2023.
  • Nordstrom Rack banner net sales in the fourth quarter increased 1.2 percent, or 6.6 percent, excluding the 53rd week. Comparable sales increased 3.5 percent compared with the Q4 period in fiscal 2023. Full-year Nordstrom Rack comparable sales increased 4.7 percent year-over-year.
  • Digital sales in the fourth quarter decreased 1.8 percent, or increased 2.6 percent excluding the 53rd week, compared with the same period in fiscal 2023. Digital sales represented 38 percent of total sales during the quarter.

“Customers responded positively to the strength of our offering across both banners in the fourth quarter,” said Erik Nordstrom, CEO of Nordstrom, Inc. “We maintained the momentum we built throughout the year, which resulted in full-year sales and profitability coming in at the high end of our expectations.”

Income Statement Summary
Gross profit, as a percentage of net sales of 37.3 percent, increased 290 basis points compared with the Q4 period in fiscal 2023 primarily due to merchandise margin expansion related to the timing of markdown recognition under the cost method of accounting, improved shrink and lower loyalty promotions.

Selling, general and administrative (SG&A) expenses, as a percentage of net sales, of 34.4 percent, increased 200 basis points compared with the Q4 period in fiscal 2023, primarily due to higher labor costs, privatization fees and an accelerated technology depreciation charge. Excluding $18 million in privatization fees and a $13 million accelerated technology depreciation charge, adjusted SG&A expenses, as a percentage of net sales, were 33.7 percent.

EBIT was $242 million in the fourth quarter of 2024, compared with $215 million during the Q4 period in fiscal 2023. Adjusted EBIT of $273 million for the fourth quarter of 2024 excluded the privatization fees and accelerated technology depreciation. Adjusted EBIT of $247 million for the fourth quarter of 2023 excluded a supply chain asset impairment charge.

EBIT was $495 million for fiscal 2024 and adjusted EBIT of $593 million excluded charges primarily related to supply chain impairment in the second quarter, accelerated technology depreciation in the third and fourth quarters, and privatization fees in the fourth quarter. EBIT and adjusted EBIT margins for the quarter were 5.8 percent and 6.5 percent of net sales, respectively. EBIT and adjusted EBIT margins for the fiscal year were 3.4 percent and 4.1 percent, respectively.

Interest expense, net of $22 million, decreased from $26 million during the same period in fiscal 2023 primarily due to the redemption of $250 million of notes in the first quarter of 2024.

Income tax expense during the fourth quarter was $55 million, or 24.9 percent of pretax earnings, compared with $55 million, or 29.1 percent of pretax earnings, in the comparative period of fiscal 2023. The decrease in the rate was said to be primarily due to favorable state provision-to-return adjustments recorded in the fourth quarter of 2024, compared with the fourth quarter of fiscal 2023. The full-year income tax rate was 25.3 percent.

Net earnings amounted to $165 million, or 97 cents per diluted share, in Q4, and earnings before interest and taxes (EBIT) was $242 million. Excluding privatization fees and an accelerated technology depreciation charge, the company reported adjusted EBIT of $273 million and adjusted EPS of $1.10 per share.

Full Year Summary
Full-year revenue for fiscal 2024, including retail sales and credit card revenues, increased 2.2 percent, or increased 3.6 percent excluding the 53rd week, and full-year comparable sales increased 3.6 percent.

For fiscal 2024, active, women’s and men’s apparel, kids, and shoes were the strongest categories.

  • Full-year Nordstrom banner comparable sales increased 3.0 percent.
  • Full-year Nordstrom Rack comparable sales increased 4.7 percent year-over-year.
  • Digital sales represented 36 percent of total sales for the fiscal year.

For the fiscal year ended February 1, 2025, net earnings were $294 million and EPS was $1.74, with EBIT of $495 million, or 3.4 percent of sales. Excluding charges related primarily to a supply chain asset impairment in the second quarter, accelerated technology depreciation in the third and fourth quarters, and privatization fees in the fourth quarter, adjusted EBIT was $593 million, or 4.1 percent of sales, and adjusted EPS was $2.17 for fiscal 2024.

Balance Sheet Summary
The company ended the year with $1.8 billion in available liquidity, including $1.0 billion in cash.

Ending inventory increased 11.4 percent compared with the comparative date in fiscal 2023, versus a net sales decrease of 2.1 percent, or an increase of 2.5 percent excluding the 53rd week in 2023. The increase in inventory was reportedly driven primarily by growth in the top brands at both banners and higher in-transit inventory late in the quarter.

Other News
The company also announced that Cathy Smith will be stepping down as chief financial officer to become CFO of a publicly traded global food services company, effective following the filing of its Annual Report on Form 10-K for the 2024 fiscal year, anticipated within the next month. The company has initiated a search for a new CFO with the assistance of a leading search firm.

“We are grateful for Cathy’s leadership over the past two years, which has been instrumental in strengthening our financial resilience and flexibility while maintaining our focus on providing customers with the best possible experiences. We wish her well in this next chapter,” said Erik Nordstrom. “We are fortunate to have a strong financial leadership team to take on additional responsibilities and help ensure a smooth transition during our search.”

In December 2024, Nordstrom, Inc. announced that it had reached an agreement with members of the Nordstrom family and El Puerto de Liverpool, S.A.B de C.V. (Liverpool) to acquire all of the outstanding common shares of Nordstrom not already beneficially owned by the Nordstrom family and Liverpool. The transaction is expected to close in the first half of 2025, subject to certain conditions, including approval by shareholders. Upon completion, Nordstrom’s common stock will no longer be listed on any public market.

Image courtesy Nordstorm, Inc.