Nordstrom Q2 revenue rises on boost from sales event, shares jump

By Savyata Mishra

(Reuters) -Nordstrom posted a second-quarter profit that topped estimates on Tuesday, with sales propped up by its crucial Anniversary Sale event, sending its shares up nearly 6% after the bell.

The upmarket department store chain also slightly revised its annual comparable sales forecast, raising the lower end to a range of flat to 2% growth, up from its previous projection of a 1% decline to 2% growth.

The Seattle, Washington-based company is attempting to revitalize its business by focusing on high-demand categories like women's apparel to counteract a slowdown in demand and boost its margins.

"Anniversary Sales were driven by newness and fall fashion... including our Nordstrom (NYSE:JWN ) private brands," President Pete Nordstrom said.

The event, which ran from July 15 through Aug. 4 this year, saw strong demand for sportswear apparel brands including On Holding, New Balance, and Vuori.

Nordstrom said it saw solid demand at the Rack, its off-price brand and will launch 12 additional Rack locations in the country before the holiday shopping season begins.

Affluent shoppers continue to spend, albeit at a slower pace, benefiting apparel chains such as Abercrombie & Fitch and Gap.

In contrast, rival Macy's (NYSE:M ) lowered its annual net sales forecast last week, blaming higher promotions and weaker demand.

Nordstrom's shares have declined approximately 3% over the past month. Analysts cited muted demand during the sale period, with Placer.ai foot traffic data suggesting July was the quarter's weakest month.

The stock is up about 16% this year compared with a roughly 18% rise in the broader S&P 500 index .



Total revenue at the company rose 3.2% to $3.89 billion in the quarter ended Aug. 3, from $3.77 billion a year earlier, almost in line with analysts' average expectation of $3.90 billion, according to LSEG data.

On an adjusted basis, the company reported a profit of 96 cents per share, compared to 71 cents analysts had expected.

Source: Investing.com