June 30, 2022

A Nordstrom store in Irvine, California.

Scott Mlyn | CNBC

Nordstrom reported fourth quarter revenue and earnings on Tuesday that beat analysts’ estimates thanks to stronger online buyer demand and growth in the off-price Nordstrom rack business.

However, the company warned it was recently hit by shipping delays that resulted in some of its vacation goods not getting to shelves and warehouses on time. Nordstrom said it was working to sell this inventory, most of which is non-seasonal, during the first fiscal quarter. It said it should return to normal inventory levels by the second quarter.

“As we move into 2021, we are taking steps to improve our inventory situation,” CEO Erik Nordstrom said in a statement.

The retailer’s shares fell roughly 3% in after-hours trading.

Here’s how Nordstrom performed for the quarter ended January 30th compared to analyst expectations using refinitive data:

  • Earnings per share: 21 cents compared to 14 cents expected
  • Revenue: $ 3.65 billion versus $ 3.60 billion expected

Nordstrom net income declined to $ 33 million, or 21 cents per share, from $ 193 million, or $ 1.23 per share, last year. According to a refinitive poll, this was better than the 14 cents per share expected by analysts.

Total revenue declined nearly 20% from $ 4.54 billion a year ago to $ 3.65 billion. That was ahead of a forecast of $ 3.60 billion.

According to Nordstrom, digital sales grew 24% year over year and accounted for 54% of total business in the fourth quarter.

While the department store operator says the timing of customer demand recovery from pandemic lows remains uncertain, it is still calling for sales growth of more than 25% for fiscal 2021. Analysts had called for sales growth of 26% year over year.

E-commerce is expected to account for around 50% of sales this year. Nordstrom recently outlined this forecast on a virtual investor day and announced that it would invest more in the online growth of the Nordstrom Rack business. That outlook assumes Nordstrom’s stores will remain open throughout the year, the company said.

Nordstrom isn’t the only retailer facing headwinds from shipping. US backlogs and increased shipping costs continue to hit businesses that sell everything from clothing and shoes to home appliances and fitness equipment for the home.

When shoppers return to the stores, the ongoing problem could make it even more difficult for retailers to plan their inventory levels and keep shelves full of goods.

Nordstrom stock is up around 8% over the past 12 months at close of trading on Tuesday. The retailer has a market cap of $ 5.93 billion, which is less than Kohls but more than Macy’s.

You can find the full press release from Nordstrom here.