What: Nordstrom, like many other major retailers, lowered guidance due to decelerating consumer demand; however, the department store group was able to meet the renewed expectations despite declines.

Why it is important: Nordstrom Rack posted a 1.9% decrease in net sales, surprising analysts as its poor performance is contrary to expectations that off-priced retail should thrive in times of economic uncertainty. Nordstrom stresses the goal of adjusting Rack’s product mix to contain more premium labels, differentiating the concept from other discount retailers.

Overall, Anniversary Sale timing, with one week shifting from Q3 to Q2, had a negative impact of approximately 200 basis points on net sales compared with 2021. Core categories, including men’s and women’s apparel, shoes and designer, had the strongest growth this quarter versus 2021, as customers continued to shop for occasions, travel, work and holidays. Active and home categories showed a softer growth. Net sales decreased 2.9% to USD 3.43 billion, compared to USD 3.53 billion for the Q3 period of 2021.

While Nordstrom did meet its expectations, after-hours trading on Wall Street pulled the stock down 8.3%.

Nordstrom meets expectations despite Q3 declines