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Nordstrom Defies Retail Slump With Higher Results Forecast, Shares Jump

Nordstrom at The Grove, Los Angeles | Source: Shutterstock
Nordstrom at The Grove, Los Angeles | Source: Shutterstock (Shutterstock)

Nordstrom Inc. raised its annual profit and revenue forecasts on Tuesday as the upscale retailer counts on demand from affluent consumers to help it overcome decades-high inflation.

Shares of the high-end department chain rose about 7 percent in extended trading.

Net sales across Nordstrom banner stores exceeded pre-pandemic levels in the first quarter with a 23.5 pecent jump as Americans returning to offices and social events snapped up designer apparel and footwear.

Earlier in the day, Ralph Lauren also forecast improved full-year margins as demand for luxury apparel stays strong in top markets North America and Europe.

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The confident outlook from Nordstrom and Ralph Lauren is in sharp contrast to peer Kohl’s and big-box retailers Walmart Inc and Target Corp, which have taken a beating as runaway inflation squeezes consumer spending.

Nordstrom, which also authorized a new $500 million buyback, projected fiscal 2022 revenue to rise 6 percent to 8 percent, compared with a prior forecast of 5 percent to 7 percent growth. Full-year adjusted profit per share is expected between $3.38 and $3.68, higher than $3.15 to $3.50 earlier.

Meanwhile, its off-price division, Nordstrom Rack, posted a 10.3% increase in quarterly sales.

Total revenue rose 18.7 percent to $3.57 billion in the first quarter, surpassing analysts’ estimates of $3.28 billion, according to Refinitiv IBES.

The retailer said net income for the quarter ended April 30 rose to $20 million, or 13 cents per share, from a loss of $166 million, or $1.05 per share, a year earlier.

The retailer reported a loss of 1 cent per share on an adjusted basis, compared with estimates for a loss of 5 cents.

By Mehr Bedi; Editing by Devika Syamnath

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