Nordstrom defies retail crisis with increased forecast; stocks jump

The Nordstrom store is seen in a shopping mall in suburban Denver May 16, 2008. REUTERS/Rick Wilking/Files

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May 24 (Reuters) – Nordstrom Inc (JWN.N) raised its full-year profit and revenue forecast on Tuesday as the high-end retailer counts on demand from affluent consumers to help it ride out decades-high inflation , pushing its shares up 11% in extended trade .

Net sales at Nordstrom banner stores topped pre-pandemic levels in the first quarter with a 23.5% jump after Americans returned to the office and social events bought clothes and shoes from creators.

“At this stage, we have not seen any inflationary cost pressures negatively impacting customer spending, which we believe is due to the higher income profile and resilience of our customer base,” said chief financial officer Anne Bramman on a post-earnings call.

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Luxury retailer Ralph Lauren (RL.N) also expects margins to improve for the full year. Read more

The confident outlook for Nordstrom and Ralph Lauren contrasted sharply with that of Kohl’s (KSS.N) and big-box retailers Walmart Inc (WMT.N) and Target Corp, which took a hit as runaway inflation squeezes spending of consumption.

In an effort to combat rising costs, Nordstrom raised prices during the quarter and demand has remained strong so far, he said.

The non-price Nordstrom Rack division reported growth of 10.3%, driven by increased footfall and better inventory levels.

Nordstrom, which also authorized a new $500 million buyout, forecast fiscal 2022 revenue to grow 6% to 8%, compared to an earlier forecast of 5% to 7% growth. Adjusted earnings per share for the full year are expected between $3.38 and $3.68, higher than $3.15 to $3.50 earlier.

Total revenue rose 18.7% to $3.57 billion in the first quarter, beating analyst estimates of $3.28 billion, according to Refinitiv IBES.

The retailer reported a loss of 1 cent per share on an adjusted basis, versus an estimate of 5 cents.

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Reporting by Mehr Bedi in Bangalore; Editing by Devika Syamnath

Our standards: The Thomson Reuters Trust Principles.

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