Both cost-cutting efforts and eCommerce investments have started to pay off for Nordstrom, given the results from the apparel retailer’s most recent earnings release for Q4 and FY 2016.
Nordstrom reported some $3.22 billion in eCommerce sales on its retail websites across 2016, up 13.7 percent year on year from the $2.83 billion raked in for 2015. All told, eCommerce accounted for 22.2 percent of Nordstrom’s $14.5 billion in total sales across 2016.
Blake Nordstrom told analysts on the fiscal Q4 2016 earnings call that online orders picked up in stores increased 45 percent in 2016. In Q4 alone, Nordstrom’s e-commerce sales hit $1.06 billion, up 11.7 percent from $951 million in the same period last year. For the quarter, eCommerce accounted for 25 percent of all sales.
In contrast to the retailer’s eCommerce growth, in-store sales for Nordstrom’s full-price business slipped in Q4. Nordstrom saw sales decline 6.6 percent in Q4 and 5.9 percent in fiscal year 2016. Nordstrom’s off-price business saw higher growth rates than its full-price brand: Sales at Nordstrom Rack stores grew 7.5 percent year on year in Q4 and 7.8 percent across 2016.
“In our off-price business, we are further integrating the digital and store experience,” said Blake Nordstrom in the earnings call. “For example, we recently added a feature in the (Nordstrom Rack) mobile app that allows customers to scan an item and buy it online if the color or size is not available in the store. In addition, last October, we tested a new store design at the Rack with improvements to the store layout and fitting room experience. This format will be incorporated in most of our 17 new stores planned this year.”
Still, Nordstrom’s earnings call wasn’t all good news. The retailer saw a 0.9 percent decline in comparable sales in Q4, well below analysts’ estimates of a 0.3 percent rise. Nordstrom’s outlook took a hit as a result — the company projects flat sales for 2017 and earnings are forecast to reach somewhere between $2.75 and $3 per share.
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