What: Nordstrom reported fourth-quarter gains but forecasts a cautious outlook for 2024.

Why it is important: Nordstrom's cautious 2024 outlook, despite Q4 gains, reflects ongoing challenges in the retail sector, particularly in discretionary goods spending. It highlights the delicate balance retailers must strike between growth efforts and navigating an uncertain economic landscape.

Nordstrom, signaling a positive turn from its turnaround efforts, showcased both top- and bottom-line gains in the fourth quarter, with net earnings rising and a 2.2 percent increase in net sales to USD 4.3 billion. The Rack off-price division notably contributed to this uplift with a 14.6 percent net sales increase. Despite these gains, Nordstrom's 2024 outlook remains guarded, projecting revenue fluctuations and a modest EBIT margin. The forecast caused a 10 percent drop in Nordstrom's stock in after-hours trading. The company remains focused on growth drivers such as new Rack store openings and digital sales enhancement, amidst a broader retail environment still wrestling with soft store traffic and an intense promotional landscape. This mixed report underscores Nordstrom's strategic initiatives aimed at sustaining profitability while cautiously navigating the unpredictable retail sector.

Nordstrom posts Q4 top- and bottom-line gains, but 2024 outlook is soft

Nordstrom Press Release