Nordstrom (JWN) earnings Q1 2023

Nordstrom‘s fiscal first-quarter sales topped Wall Street’s expectations on Wednesday, even as the retailer reported a spending drop and predicted slower sales in the coming months.

The higher-end department store also reiterated its outlook for the full year. Nordstrom expects revenue to fall 4% to 6% and adjusted earnings per share to range between $1.80 and $2.20 for the fiscal year, excluding the impact of winding down its stores and online business in Canada.

Yet despite declining sales, Nordstrom stressed its progress with managing inventory, cutting costs and drawing shoppers, especially to the off-price brand Nordstrom Rack. Sales at Nordstrom Rack improved late in the quarter, with the strongest performance in April, the retailer said in a news release.

“We’re encouraged by our momentum, especially given the uncertain macroeconomic environment,” CEO Erik Nordstrom said in the company’s earnings release.

The company’s shares rose as much as 9% in after-hours trading.

Here’s what the company reported for the three-month period ended April 29 compared with what analysts were anticipating, based on Refinitiv estimates:

• Revenue: $3.18 billion vs. $3.12 billion expected

In the fiscal first quarter, Nordstrom’s net loss was $205 million, or $1.27 per share, compared with a net income of $20 million, or 13 cents per share, in the year-earlier period.

Excluding the costs related to winding down Canadian operations, Nordstrom’s adjusted earnings per share were 7 cents. It was not immediately clear how those figures compared to analyst estimates.

Nordstrom is looking for growth after it struggled with stagnant sales and largely missed out on the stimulus-fueled spending boom that benefited other retailers during the Covid pandemic. In the most recent fiscal year, which ended in January, the company’s total revenue was $15.5 billion. The figure was flat compared with the total revenue that it reported in the fiscal year that ended just prior to the start of the pandemic.

Its lagging sales drew interest and scrutiny from activist investor Ryan Cohen, founder of Chewy and chairman of GameStop, who bought a stake of the company earlier this year.

Nordstrom’s sales continued to sag in the most recent three-month period. The company’s total revenue, including credit card sales, fell about 11% from $3.57 billion in the year-ago quarter, but surpassed Wall Street’s expectations.

Sales in most categories in the U.S. declined in the first quarter year over year, the company said in a news release. Nordstrom attributed some of that to difficult comparisons. In the year-earlier period, shoppers flocked to stores for designer shoes, dresses and wardrobe refreshes to attend weddings, reunions and other social gatherings as the world reopened after the pandemic.

Net sales at Nordstrom’s namesake stores decreased 11.4% year over year, while…