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Nordstrom, Inc. JWN is scheduled to release third-quarter fiscal 2023 numbers on Nov 21, after the closing bell. This fashion specialty retailer is expected to have witnessed revenue and earnings declines in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 13 cents per share, suggesting a decline of 35% from the year-ago quarter’s reported figure. The consensus mark for earnings has moved down by a penny in the past 30 days. The consensus mark for revenues is pegged at $3.4 billion, indicating a decrease of 4.1% from the figure reported in the year-ago quarter.
In the last reported quarter, the company posted an earnings surprise of 86.7%. Also, it delivered an earnings surprise of 75.4%, on average, in the trailing four quarters.
Nordstrom, Inc. Price and EPS Surprise
Nordstrom, Inc. price-eps-surprise | Nordstrom, Inc. Quote
Key Factors to Note
Nordstrom’s third-quarter fiscal 2023 results are expected to reflect the significant impacts of muted customer demand due to the ongoing macroeconomic environment. Reduced consumer spending amid lower income groups, stemming from the tough macroeconomic environment, has been hurting revenues across both banners.
Management expects the impacts of the winding down of Canada operations to hurt revenues throughout fiscal 2023. The impacts of the closure are likely to get reflected in the fiscal third-quarter results. Additionally, the elimination of store fulfillment for Nordstrom Rack digital orders is expected to have weighed on the sales performance of the Rack banner.
Our model estimates a sales decline of 5% for the Nordstrom banner and 2% for the Nordstrom Rack segment in the fiscal third quarter.
However, the company is committed to enhancing customer experience via its Closer to You strategy, optimized supply chain and better efficiency. These endeavors are expected to have slightly offset demand-related and other headwinds.
On the last reported quarter’s earnings call, management stated that it is focused on enhancing customer experience, improving the Nordstrom Rack performance, increasing inventory productivity and progressing on its supply-chain-optimization initiatives. The company is confident of the strength of its brands and its ability to drive profitable growth. Gains from the company’s actions are expected to have boosted its fiscal second-quarter performance.
Nordstrom has been making efforts to drive efficiency and improve customer experience via faster order fulfillment. It is also on track to reduce inventory and optimize product mix. Also, increased focus on Nordstrom Rack bodes well. The company has witnessed an improvement in the Nordstrom Rack banner, driven by strategic brand penetration increases.
The Nordstrom Rack banner has also been on track to increase productivity throughout its network, reduce transportation costs and delivery times, and enhance services via faster delivery. These efforts are expected to have cushioned Rack’s performance in the to-be-reported quarter.