Nordstrom reported a fourth-quarter 2023 result above market expectations, driven by strong sales over the holiday season. However, the American retailer’s announcement was marred by weak forecasts for 2024, a consequence of the economic contraction impacting the United States.
On March 5, Nordstrom announced sales for the final quarter of 2023 of $4.42 billion, ahead of market expectations ($4.39 billion had been forecast).
However, forecasts for fiscal 2024 from the Seattles-based giant, owner of the eponymous department store brand and discounter Rack, are below expectations.
The Group forecasts annual growth for 2024 of between -2% and +1%, whereas analysts were expecting stability at +0.004%, according to the LSEG.
For Morningstar analyst David Swartz, “the outlook is disappointing… Nordstrom hasn’t really recovered from the pandemic.”
The need for caution
These weak forecasts – in line with statements by its rival Macy’s – offer a sharp contrast with the good results recorded in the fourth quarter, thanks to the end-of-year festivities, which boosted sales of shoes and beauty products in particular.
Nordstrom’s decision to err on the side of caution is based on the fact that the economic climate is not in favor of non-essential products. Today, the pleasure purchase is directly impacted by economic inflation, which is increasing the cost of health, housing and food.
However, Nordstrom’s statement is difficult to understand, given that although prices rose in January, the annual inflation rate forecast for 2024 is the lowest recorded in three years.
Rack, the group’s driving force
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Featured Photo: © Connie Zhou/Nordstrom
