Nordstrom sales plunge nearly 40% on pandemic-led store closures
Upscale department store chain Nordstrom Inc (JWN.N) on Thursday reported a nearly 40% slump in quarterly sales, as lockdowns to contain the COVID-19 pandemic shut stores, Trend reports citing Reuters.
Several retailers are reeling from the impact of the coronavirus crisis, with Nordstrom rivals J.C. Penney (JCP.N), J.Crew and Neiman Marcus all having recently filed for bankruptcy due to mounting losses from the pandemic.
Seattle-based Nordstrom said digital sales rose 5% to $1.1 billion in the first quarter ended May 2. The retailer has strived to reduce inventory, cut costs and sharpen its marketing strategy.
“We successfully strengthened our financial flexibility by increasing liquidity, lowering inventory by more than 25 percent from last year and significantly reducing our cash burn by more than 40 percent from March into April,” said Chief Executive Officer Erik Nordstrom. “We’re entering the second quarter in a position of strength.”
Shares of the company were trading up nearly 1% after the bell on Thursday at $18.30.
However, total net sales dropped to $2.03 billion from $3.35 billion.
Net loss came in at $521 million, or $3.33 per share, in the first quarter ended May 2, compared with a profit of $37 million, or 23 cents per share, a year earlier.
The company said store closures and restructuring led to a $173 million charge.
Earlier this month, Nordstrom announced it would close 16 of its 116 full-line U.S. stores to save cash. Its off-price “Rack” stores continue to help the retailer boost sales and attract new customers.
Earlier on Thursday, America’s top dollar store chains beat profit estimates and said they would benefit from demand for affordable groceries and household essentials in coming months as rising unemployment threatens to spur a deep recession.
Dollar General Corp (DG.N) and Dollar Tree Inc (DLTR.O) saw a surge in sales of toilet paper, cleaning supplies and packaged foods amid the coronavirus lockdown.