That contrast reflects a broad-based trend across the retail lanscape: While the likes of T.J. Maxx and Marshalls are scoring big with shoppers and have plans to open many more stores, traditional department stores are struggling mightily. Even as the wider retail industry had relatively strong holiday sales, department stores such as Sears, Kohl’s, Macy’s, and J.C. Penney each experienced declines in comparable sales during the critical season.
Nordstrom’s results underscore the tricky decisions the company has ahead of it: Its off-price business is where it has clear momentum. And yet, some of Rack’s appeal comes from the halo effect of its upscale sister brand. At some point, there’s a risk that Rack’s ubiquity starts to take some of the luxe sheen off of full-price Nordstrom stores.
The company’s revenue in the quarter rose 2.4 percent to $4.2 billion. Investors sent the stock up more than 3 percent in after-hours trading as Nordstrom made some progress on key measures: It managed to reduce its inventory and steer away from profit-eating markdowns.
In recent weeks, Nordstrom found itself in a particularly bright spotlight when it dropped the Ivanka Trump clothing and shoe line, a decision it said was based on weakened sales performance. President Trump then lashed out at the company for its move. On a conference call with investors, Nordstrom President Peter E. Nordstrom indicated that “it’s not really discernible one way or the other” whether the tweet had any impact on sales.
This latest quarter ended on Jan. 28, several days before the company stated that it was no longer carrying Ivanka Trump goods. Therefore, any backlash to that move would not be reflected in these results. Similarly, if some anti-Trump boycotters have returned to Nordstrom now that the retailer has ditched the line, that wouldn’t show up in these figures.
The company said its women’s apparel and beauty departments were bright spots in the quarter. In particular, it said jeans and collaborations with “limited distribution brands” — the ones that are hard to find at other retailers — did especially well.
According to research from Slice Intelligence, Nordstrom commanded the seventh-largest market share in online shopping this holiday season, capturing some 2.3 percent of all the dollars spent. That puts Nordstrom slightly behind a key rival, Macy’s, which grabbed 2.4 percent, and far behind the industry leader, Amazon.com, which accounted for 38 percent of holiday season e-commerce sales. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)
On Thursday, the company reported that sales on Nordstrom.com accounted for some 25 percent of the chain’s full-price sales in 2016.