Nordstrom reported better-than-expected profits and sales for the holiday quarter, prompting the retailer to offer an optimistic outlook for the coming year in spite of ongoing supply chain concerns and rampant inflation. Shares of Nordstrom spiked more than 35% in after-hours trading immediately following the report. is currently among the most heavily shorted stocks, with 22% of its shares available for trading sold short.
The retailer called out improvements in its off-price business, Rack, amid a report that the company has been reviewing a potential spin-off of the segment following its underperformance in recent quarters.For its fiscal fourth quarter, Nordstrom said net sales at Rack were down 5% on a two-year basis, marking a sequential improvement from the prior quarter when its off-price segment logged an 8% decline compared with 2019. The segment lags behind full-line business, with that revenue stream rebounding to essentially flat with 2019 levels.
Nordstrom CEO Erik said in a statement that the department store chain is focused on three key things: improving Rack’s performance, increasing profitability and optimizing supply chain and inventory flow. Nordstrom net income for the three-month period ended Jan. 29 grew to $200 million, or $1.23 per share, from $33 million, or 21 cents a share, a year earlier. That topped estimates for per-share earnings of $1.02