JWN - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. And welcome to the Nordstrom First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode.

We will begin with prepared remarks, followed by a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. turn for over Nordstrom. I’ll Chief Michael time, Officer Accounting this the to call Maher, At

You begin. may

Michael Maher

Good afternoon include and earnings for call thank questions. you for last your minutes joining XX and will approximately minutes will XX us. Today’s

that Before to be in Investor slides, to nordstrom.com. on viewed referring Relations be we’ll section we can want begin, the I mention which

Nordstrom, and Participating Our with our slides Bramman, discussion to in call Officer, provide refer today’s the who may Officer; company’s include and a please forward-looking quarter Chief are Financial Chief business Erik Harbor performance. Anne discuss statements, language. Executive first so will Safe the update

Joining Brand Erik. during President Chief Officer. Nordstrom, And Pete now, the session the to will I’ll be over and of Nordstrom, Inc. turn Q&A call

Erik Nordstrom

joining thank afternoon today. you Good for us and

with the first transformation our in potential progress were results quarter, and sales unlock pleased our digital-first improving our the to which full momentum work in by marked continued platform. of as we We’re

to events, are product strong position our continues to activities, growth a on opportunity this as drive As unique capitalize and in return-to-work. social in consumers connection we our share and offering to customers including capture ability us to travel demand profitable recover, and confident our place market resume and

the reflected XX giving increasing Sales COVID and pace restrictions as trends remainder were digital. that markets year. to X increased earlier by across we row, topline in other as of stores the in in-store and both quarter improvements by points, improvement both of growth have trends in with and us lifted to opened points look categories, online. up Our Nordstrom about sequentially recovery the markets businesses, third merchandise Stores for the in optimism a in percentage continued outperformed percentage supported Nordstrom recovery broad-based Rack, regions and

to the we choose in to in who to new our our growth convenience successfully us reach how at We Our most top sales. markets important solid all Day the toward important laid broaden they our including make no win greater February, the velocity. engage markets, our Rack our XX matter the connection Starting in and Detroit priorities market performance quarter better bringing customers service and over level increase reflects our our rollout in shop. the Atlanta, execution up of helps expanded with of digital win to now Investor through last priority most of is Market an of strategy unmatched to months. Nordstrom access place out in our with in and Houston, product, XX% customers XX markets, Minneapolis, Strategy and about three markets,

XXXX, Rack scale compared order We continued doubling we the with ship-to-store expansion the to to of and stores, launched like pick-up the than order all enhanced capabilities Nordstrom quarter more pickup first to in XXXX. of

nearly XX capabilities day powerful to next stores addition, our order for picked launch, continue pickup of volume across in one-third integrate Rack at brands. markets In was since we our two up our as Nordstrom.com top

closer get approach ever our to to We also than to continued evolve our before. customers

styling are styling our offer expanding digitally. tools, salespeople our in than store customers just quarter, percentage increase highly-relevant salespeople made to to both quarter programs, XX utilizing our point and progress percent ago. now significant first these tools allow a personalized XX a This the quarter compared in to our new of we recommendations deployed with More remote

from We quarter are Livestream new of in year. introduced on these the significant milestones for to best and the also initiatives our growth some pace delivered featuring We meet events, Shopping brands. our

total Nordstrom sequential Rack. a the Rack the improvement quarter. on the XX% In broadening is declined XX-percentage-point fourth Our from to second growth sales of quarter, priority reach XXXX,

in to XX increase velocity, sales mobility. these some Active of price-oriented last is and growth hybrid and to percentage digital customer rebounded price, and of choice nordstrom.com in With maintained these We first strong the digital, growth our spite year than quarter at Home Kids, first our has anticipated XX% to increased Increased continued and store managing over sales in categories. remain penetration XXXX challenges in Importantly, the our XX%. XXXX. With two total with years quarter, the across in past early in to inventory repositioning points supported traffic over encouraging. increased XX% respect in initiatives the nordstromrack.com a of merchandise even doors innings as the and we Digital priority over our slower progress brand flow. inbound progressing, in offerings sales XX% compared increase and increased by is

and Our apps drivers be of engagement. to Rack customer powerful Nordstrom Nordstrom continue

quarter more customers the of including quarter. app Mobile the total XX% for a we apps, million sales During digital first approximately downloads of generated two-thirds quarter digital of XX% traffic than our and over total the over increase of XXXX. a represented users

we ahead, the capabilities enhance continue to experience across improve digital the journey. Looking to customer shopping our

the million with of several to more the our choice offer over we plans One increase to next count years. key is customers to choices, see opportunities approximately X.X

saw increase dropship core Active in-demand XX% categories and This quarter, increasing growth this seen up to was drive compared in count benefits allowed ramping without in more than like our our improvement initiative, in conversion, an business we We’ve strong to approximately and continued versus our a corresponding assortment which XXXX, choice XXXX. strong driven Home, expanded investment. XX% digital primarily sales inventory in from by categories with Kids. This both also us

brands them, with launches Skims and to pop-in our Fear with some for most like product through featuring New to Concepts shop of God. that continue We exciting of the customers deliver the matter our

quarter, you. event well-timed return As significant we from activities. forward of we to closer the step approach transformation to in believe will and to second a our customers’ Anniversary ahead also look be pre-pandemic to benefit getting mark The that will our increasing the confidence Sale to

our that experience. to is superior an have best engages shopping goal with Our rewards a and event customers,

year’s editorial a with new personalized of in-store We adding catalog digital last and are launch on recommendations, product content events. while virtual and building

and total year, choices alternative we support digits by we models ensure selection with Overall, Anne Anniversary our To We that on to our our customers opportunity accelerating experience to approach to differentiated the new also momentum. of loyalty Anniversary closing, excited are accelerate Nordstrom. will us customers, sale, to important to working Anniversary, our are about which coming talk will an in partnership while of double one-of-a-kind receipts, is also we priorities out vendors. remains offering supported customer gaining significantly expansion positioned for very In best with XXXX, product an are our vendors serve our new provide increase strategic for this to a up customers for with introducing our shortly. to focus compared and first quarter, our ways about which

demand to position as on ever share customer We are stronger market in our capitalize a opportunity recovers. than

We’re to it and look to to confident detail. discuss in our ahead. financial our Anne greater sharing direction that, in progress I’ll results continued our turn forward quarters in over With the

Anne Bramman

Thanks Erik.

continued restoring beginning our second strong with trends Our first that inventory a has the strengthening our the to in improvement position continued sequential quarter of results of represented progress the and year, sheet. sales into balance quarter, start

of headwinds. increasingly our first our deliver in payments. Our sequentially. to Total quarter were accelerating confident of us leaves including percentage pent-up ability performance biggest improving the and of events, for XX% momentum on targets Rack the in points percentage in sales Demand the recovery markets activities financial despite XX some the quarter our in first sales stimulus down improving Nordstrom cost points in our year accelerated to the categories. government Nordstrom a increased are Nordstrom many fourth improvement travel compared activities same Sales XXXX, vaccinations, both driving lifting restrictions Rack, Nordstrom points improvement from demand and X sequentially of social X sequential benefited return-to-office. with back-to-normal percentage and Encouragingly, broad-based from representing fiscal quarter in trends quarter. reflected sales are These throughout also the period across as resuming, and COVID

in to for and recover. solid shopping even to as We experiences, customers’ our online our satisfy desire traffic delivering continue continue sales store growth digital

XX% full grew perspective, of digital-first period our across product fiscal our improvement platform. XX% digital saw from we merchandise Our the a From and with as XXXX, compared to potential offering. business benefit broad-based efforts our year-over-year the unlock we continued in same to

and strength the start XX% the sunglasses, designer compared and We since up in as sales during led points and of to recovery well well see categories that dresswear, particularly saw continued as brands, to responding where dresses, classifications penetration makeup XXXX are customers to our categories denim, COVID-XX, spring shorts has levels our like swim, handbags. pandemic. X active home, like percentage and by We increased

the to second recovery Taken categories as returned with April, in XXXX and into these compared strength March continuing a growth early group, to quarter.

quarter. Rack. is approximately Across the supply current was performance decision the our decreasing both a of Nordstrom in quarter by This to in first the outpaced trends well-positioned and in Anniversary spring inventory quarter sales inventory improvements XX% category inventory quarter, the pulled at as includes in allowing At to vendor summer for versus prepare key start $XXX the mitigate inventory sales. and period sales percentage underperforming progress Nordstrom Rack, and XXXX same was reflects X% made growth Nordstrom we inventory the roughly backlogs time that million first Nordstrom accelerate in-season with to for forward we second seasonal pandemic. a and us compared the Our of from into with our decrease Sale. Nordstrom since impact, the in categories This flow, and Rack, chain supported both significant fourth the shipments inventory point support as and potential the fiscal exit sales addressing X

a categories assortment flexibility with expect distort environment, Our high the inventories exceptional provide chain agility into they can from continued and us. appropriately operating challenging product teams with what in demand remains and supply ensuring our we are customers

as decreased margins net inventories and compared took managing flows primarily Looking offset we into coming fiscal levels permanent supply in of as in inventory the by reduce with with period lower lower disruption deleverage on a quarter, reductions costs. XXX as to same the the points action progresses. elevated potential and XXXX, year to basis is due partially occupancy balancing to ahead, mitigate sales the percentage chain buying sales, profit, sales merchandise while receipt Gross company

with volatile, impacts XXXX. sales percentage creating reductions the fiscal constraints, as same were continued remains well XX%. of cost Total compared continued by basis permanent elevated While benefit moderating, as underlying challenges to period XXX overhead industry approximately the in as labor increased net are COVID-XX demand environment supply SG&A expense apparel costs, related of in Freight and pressure. from shipping labor and points offset partially the a clearly

which to expected expense par-call year over XXXX. approximately XX% feature beginning X.X% between sales. The X.XX% $XXX us onset continued our unsecured progress revenue secured X.XX%. depending additional penetration secure fully This with unsecured, XX% full during used to notes, were transaction to April annualized expect representing the our pace first than being in the favorable we continue rates restoring $XXX growth deliver used on to our of in is the make senior for sheet, portfolio Proceeds the during reduces of while highly were XXXX course Digital We the the our outstanding down return balance redeem approximately interest allowed debt in issued digital million, April of store continue creating entirely the XXXX, to at more notes. notes vary on the of the recovery. flexibility bond to a closing and by to million estate pay Based quarter real also prior unencumbering results, quarter pandemic. to in million interest in of $XX COVID-XX with

margin We our first out. are external on X% play pressures deliver X.X%, to year. headwinds to responding and guidance with operating for cost a depending see for full EBIT speed recovery of path we to half in continue and And the to an demand operating and the on margin how remain breakeven approximately cost manage track the on

normalized perspective, we’re supply Our expected to income year. primarily a investments CapEx the at capital chain From technology levels of to XX% X% planning sales, is capabilities. of allocation around X% to tax in be for support rate and

and our profitability, times drive cash We improving expect year. a evolve our we of have X model, be to strong shareholders position and continue gains return leverage us Overall, to to to the approximately in response flow generation. to share well customer the end seen to reduce our positioning initiatives operating returns cash to ratio to by market to while

growth targets ability is on Michael our like as XXXX for confident profitable demand still to for we While considerable respect there turn and to Q&A. generate uncertainty with recovers. COVID-XX, now sales over in remain to deliver our to it I’d

Michael Maher

Anne. you, Thank

time with question ask started Q&A, at everyone we one to one. participants limiting to Before a a to allow are chance we get

session. will now Q&A We to move the

Operator

Chen you. Our proceed question. Instructions] is Please first question Thank your with with [Operator from Oliver Cowen.

Oliver Chen

opportunity Hi. quite your impact innovative. should as amidst Anniversary will Sale? you alternative increase sales, this especially to inventory And choice The sounds these also the how Thank arrangements What you think we about count margin about know flexibility, to you. versus look and profile? as

Anne Bramman

Thanks. Oliver. Hi,

come what, know a perspective about You about of about and inventory thinking some Pete, and bit the the margin. at then talk choice end sales questions back we’re offering from I’ll an little counts how assortment and address your

Pete Nordstrom

Yeah.

in that us in creates model terms us wholesale goes in all the model in, lot particular traditional obviously expand there’s that with I the effort bringing that. count allows leverage that way in work of of choice that it think inventory main a the for if lot with was a a goes a of here to is manual thing dropship

So it’s expand for to a great choice count. way us

I the months category Home or think if where really had so we’ve pick the play that. we seeing to of out, last significantly quite has -- and an you’re over a dropship is part XX example, important been in expanded that

So be it us is going of into creates as move dropship. it buy percentage you’ll true open from offering we and that continue as more Anniversary, a for have that decent to we with flexibility to to is available to our see

Anne Bramman

on through our investment, to we your were is flow I XX% down inventory versus that the counts The choice P&L. thing one more about highlight the would question XXXX. And X%. added But we

own you as that economics you’re sharing I inventory, don’t the when and vendor just is demand So customer well. think really the a to gives responding that you flavor it the with

of all a for it’s solution. think great I involved, So really us

Oliver Chen

you regards. Thank very much. Best

Operator

Capital KeyBanc with Yruma Markets. Edward is Next

Edward Yruma

improve in excess gross fourth afternoon. gross guess as taking I had quarter, some I inventory that start promotional anticipated, check Thanks any the Thank out to be guys seems you were know for question. the on I pretend going merchandise. Good margin. focus in clearing sales to forward? comments to the or as a might that industry the you. Hey. the wanted which little current bit accelerate and your of first situation, margin on quarter how environment, you for

Anne Bramman

Hi, Ed.

context the I about of talk what, thinking then and in You what will a circle what’s rest Pete, on talk know little we’re about back going about industry, some the give and for the year.

Pete Nordstrom

Yeah.

what activity. the that I to of promotional put margins been promotional not gets that be given compared in In pause terms And pressure would be on was for less would momentum gross expect sales position think in the everyone times. with low for think, around was, trends, activity the recent relatively that. XXXX, That’s it than example, would say, I we

Anne Bramman

and the We far few inventory rest progress faster -- we we customers’ for to we’ve and QX, look like XXXX the and QX offering ago strong we The position to we a as our it sales inventory into -- are from was seasonal. things. the months think so the on really was really of component was thought you and about relevant piece was through where than really as it deleverage our with as just feel an clearing against piece. And you related deleverage if remind on we heading landed One, and the pleased got year. two markdown a at -- QX that’s other

margin see that favorability we’ll -- continue the in going So and merchandise component forward? starting we in QX anticipate to our

Edward Yruma

Thank you.

Operator

with from Our Evercore ISI. next is Saad Omar question

Omar Saad

versus ask that acceleration, taking deeper compare stores and any X-point could if kind difference a of interesting between e-commerce? it if Is there’s in Thanks business? traffic it’s you Is where, back and then evening. in there, up to dive the coming you stores like maybe the vaccine some of that discern for on I COVID on the whether it a of wanted in categories the in bit categories, and sales as dive focusing little my takeaways return-to-work versus older contrast and will. younger driver and question. Good reopening you pick pandemic, there kind Can kind return-to-social stimulus consumers? customer and versus

I helpful? So be acceleration, would that dive deeper really in think, on Thanks.

Erik Nordstrom

from as we it is that. our We that. It’s Omar. is of Erik. to a so in to getting stores a those of percentage percentage southern and I and in some and stores regions, west X points Okay. we Thanks, some some to out well. in mean, see and This southern Yeah. from east find basically But customers regions spot in greater traffic our same our traffic. that we lot have have see -- than performed up conversion opened anticipate starting to XX points northern we’re just northern get the more. And there difference see mandates from will encouragement

well. as the categories out seen We’ve that categories, favor categories in of a mentioned really You were pandemic. during shift definitely

people a are those the of looking big our disproportion And footprint. of And turning. of and really you many Our we’re to that the of buy in bit signs that, also come us, should, starting more. headwinds at start out categories to there and starting our -- out markets amount a People are unique are geographic in think, get during are one many to pandemic our mix get starting of back. our and I ways more categories and to big had

this lot hearing summer. customers weddings from a about We’re

the back and and to And but a handbags be restaurant, get trip. be could so it’s not necessarily out, dresses, buying a go suits anything office to to on to could

the cannibalized we’re has starting momentum that encouraged we’re remained very increasing And see not there. the movement to Online has of and lot across Board. online. store a strong seeing We’re traffic

Omar Saad

you versus stimulus can on discern anything that? vaccine, And

Erik Nordstrom

point driven It’s to No. We Oh! I’m somewhere. sure factors. hard how much can’t. out by Yeah. in those it’s is there

Omar Saad

luck. the for Thanks Good color.

Operator

Next is Telsey with Dana Group. Telsey Advisory

Dana Telsey

Good afternoon, everyone.

Sale, that are the about to timing are differences whether it’s you. to what chain XXXX, in you see And promotions? unpack of congestions, was holiday this year, XXXX mentioned open thinking you’re in orders? then, terms you cost and Can it you of port about for the in Thank think As how relative you you and beginning the you’re just supply and the seeing what Anniversary Anne, headwinds? whether terms were preparation

Anne Bramman

question you do Anniversary piece. to the Erik, back the take cost want on circle I and can

Erik Nordstrom

XXXX. Dana, Yeah. mentioned, you

year in Anniversary years always a in has I of certainly where, our I took the year difference and particularly then features, that think digital Anniversary digital we then to step is event there. engagement big some And wishlist year. times add the towards been digital exceeded actually, digital. And the our feature you there. a last recent huge more expectations a added last other greatly

tools people over people’s doing we part for the like sales the of have Again, and XXXX. the year discovery year. them people sales, have have in particular, customers, we than tools sales physical now and traffic in more more our stores will lot be our to in and remote working our been big this The a well, we to that there’s our So versus had ability digital them to using we And quarter. them digitally really going connect especially features difference as digital think still know those engagement half last be assets will to do much selling. have last Anniversary

salespeople to Anniversary. where to Anniversary to to We out discover help tools can for to product these new their digital expect them, customers use reach customers that and help best our grow

Pete Nordstrom

Pete. Hey, Dana. is This

we fall everything pandemic year that about us I’d there to that of and thing makes good are a relative resuming were tipping to this other for out Anniversary before. were fall getting next the like early add just in fact -- really there things represents The point the kind and people is they where our optimistic lives event

getting sale when thinking people to us to or For and new it’s works for best on great be returned And products. can example, upcoming that that about campus. back season the savings office

great exists to that enough of for buying now I okay, here’s Nordstrom. of terms on the and in the of there. is big been opportunity kind timing shop so People And time sidelines these out go a a things really say, and great, reason think, while I’ve is types the at

Anne Bramman

learned would macro about and in labor Answering between and costs. saw months throughout environment XXXX just that Yeah. agile. COVID-XX we XXXX think more we remains XX that different. months we respond with seeing pressures back, the the supply remain volatile, though sit to the and environment we’re question say, your the what we’ve and and and got it are we in past disruption chain XX of pressures that flexible And I freight just even thing is I to remarked that

see mitigate to continue we things doing as we’re offset So, some volatility, to that.

receipts some QX and forward So the into customer for as sure example, meet customer for wanting it the make had of QX and buy they we we that was we pulled from demand can to shopping -- to it. there were

is to we’re have. looking thing at that that second ways headwinds cost offset of The some we the

place in We’re guidance even we of on our levers lot there. months lot that. And ago, a few contemplated of as out scenarios a we went pulling through a

that. puts we’re macro And so, around -- -- the to we takes of is environment this, as contemplated we seeing we’re responding and part in this what and we are

Dana Telsey

you. Thank

Operator

Matthew Boss is with Next JPMorgan.

Matthew Boss

exiting terms your crisis in distribution? just any Thanks. where what I XXXX. wholesale of would consolidation line stands the maybe the key give both performance given you guess the broader expand and vendor see to-date at of What in market to topline Rack? you Great. maybe share opportunities grade and relationship, the relative opportunity you full Erik, today confidence to gives

Erik Nordstrom

Yeah. Thanks, Matthew. Okay.

quickly both Board, our are things open with and exceeded starts The to is start changing Rack our We’re economy It’s again. improvement certainly versus to across out up significant this very year last topline and expectations, customers as our versus get quarter XXXX. the Nordstrom and plans. and in sequential last there the encouraged --

pandemic how points it’s quarter capabilities over this like of pandemic our need that, opportunities a Nordstrom we of connected. there year, that. And Rack, and they’re the that of the proof and on where business And second opportunity been place coming strategy we’ve -- out the is half to results a what our the over We’ve two really in year with and both invest come investments big working the capabilities business. we digital stores last to a as businesses across the get for So focused and But we see pandemic, those on QX in lot of business our we of on in we last pay see we’ve pandemic, to during online. a physical last the our were between been have the into shop, over lots build to opportunities digital almost and connections have scaling. aggressive lot we lot particularly things remain was We is truly higher of as us of share, of know opportunity of big where Market long-term opportunity shown and to half top hold our big seen dressing. start headwinds of and grow certainly, online the those as market and encouraging brands, like as to big how that or to stakes and our the market we mind model are back we Nordstrom lot of lot and having standard see of us kind the Those the fit off. scale model a customers we share capabilities categories have grounded categories again, customers categories, and is lot we ourselves our and there.

As think, far vendors, pass it Pete. over as I I’ll key to

Pete Nordstrom

Yeah.

the of opportunity I vendors a tough is calls relationships that look that I key last lot stuff solve tell common because we these for way, think as of us. really perhaps, couple some of a with to mentioned may to issues where to it’s times I you, vendors, the really I created would have there’s this silver And great is, lining like that got we’re for. feel advantaged improve

every to win business They are a in these got that’s that very all, us, for and Nordstrom lot customer. First and our them like of to of attractive customers don’t directly. do so big us. brand customers it’s we a many We’ve go with, cases,

in stores the think our digital assets the fuse I made the that physical and the of the over we our of part terms the business years with capabilities people. ability and investments to

We’re that those journey I along on pretty attractive. and far well are think capabilities

service these making talented lastly, had assortment fair good functionality of there’s business approach. guys consistency our they’re we we’re to lot experience amount sure consistently there. sell trust we bring our of with that their brands being to that then say, people really least, of have online. relationships brand, just our longevity at And a merchandising they and a to the working can directly and leaders have store to I’d service lot have brand, in and of vision. customers pride care so with in not that, through our it’s the really And take a and a executing Our life sell wonderful the or with going anybody team their and then that doesn’t that elevate their the with to of and really our We’ve got

a consistency, That all there’s built helpful. I been trust so has up over think, around us. the change the And happened that’s years, particularly been of really lot that’s

in So well. openness our and place going XX new vendors and the a to last that serve think willingness as forge spent really energy a both work of is kind with sides lot months, And go. to we’ve to to on I trying of through

Matthew Boss

luck. of Best color. great That’s

Pete Nordstrom

you. Thank

Operator

Baird. is Robert W. with Next Altschwager Mark

Mark Altschwager

taking for my afternoon. Thanks Good question.

trends strategy topic XXXX? progressed? then share some from just the think market customer the where the results on of you’re broader Thank some couple has on market up of you local in move fleet. of engagement follow the can me, can a accelerate you. of been I in what in guess, strategy to And relatedly versus metrics terms new help as any your wanted these you reopening as in over moment, that Just just, curious am metrics key learnings, longest the the are can you for past you what markets place share key I markets seeing any the on, excuse the to years and rollout has stores the the

Pete Nordstrom

of share with Yeah. points couple Mark. guess I Thanks, you. we a data would

is we top our sales. in and out to led that’s our including now last there Racks Racks uptick a XX that rolled our ship-to-store We and regions. fall, significant is to November market of market in order strategy strategy all As October, mentioned, in our in about in our markets, XX% pickup which of

of these more strategy doubled markets. Our one-third nordstrom.com versus Nearly market XXXX. pickup pickups than the in day has order purchase next

Rack provide that’s in stores points our Nordstrom we physical they have, picked assets, a one. and XXX stores, up goes I customers. up at didn’t really about Rack capability lighting be Nordstrom a Nordstrom that assets, about real and we and to, our stores stores. pickup Rack And purchases got and up important picked these Our our have think again, market to it, have Rack we go for stores third to of nordstrom.com convenient to very It

now is people And just XX% our take using QX. the just Our our sales next is half pickups of our they I’d and people sales factoid as Over can engage are it’s our with advantage -- styling up as other from tools, share which of in is day significant. remote customers capabilities.

the XX% So of trend the access salespeople provides and selection faster that that salespeople customers we’ve greater our to it and and is the merchandise part so see And that digital tool of but our over XX% to in their delivery. part is other QX gone have, from for QX in we continuing.

uncomfortable a local You Angeles. it to than context the New -- service think makes Los we It’s our actually York And of coming more pickup, traffic in mentioned do in locals, have recovering do back saw hubs We a can stores both into be where our store pandemic, I do sense. saw a to be neighborhood faster a that order and they the service an may hub customers fastest. return, alterations. an where big come

Mark Altschwager

Thank you.

Operator

with Wissink Steph is Next Jefferies.

Steph Wissink

to afternoon, Good if a could. Anniversary you. bit on we everyone. wanted more Thank focus We Sale

new more year’s risks without some Are your mentioned a this can you choice vendor counts able different inventory relative bit in level few last take fashion Thank the leverage you to of the think talk in But about a partnerships the you. as I way? digits. years? of risk you you and up sale to maybe double little

Erik Nordstrom

Stephanie, that’s great question. a

and as it’s could thinking a commitments the I ago, little conditions is little you’re that we today. was things is buying relative put customers changed more the And been demand off event if months bit a out this much for plan future to than in really mean, that bit how we a know I thing this we have that about evolving. what what much we’ve decisions given complicated different think that’s six that quite have in. made macro just the knowing we as important consumers

about think like this going So I’d point tipping there’s campus it think that occasions be to to to the that challenging, going nail to I it. right were that it’s people back social just head resuming and on we’re again, knowing that’s activities

months wasn’t ago, clear. abundantly again, six So, it

Nordstrom, that but would know they buy So we that is drives expect sale, replenishing thing that’s a really from things that people of something usually it new. to the about do part reason there is that

always it orientation that’s at think all to And there’s -- times. I So that that true.

good along, and that dropship. we for table feel about conservatively well went feel for sell relatively strong set think, good choice talking as to to ultimately, really relative in been we the Anniversary. position knowing we all I a it. us and two into got half half really to good it two, through we to has need about we There been that a given put flexibility it in So increased some But we’ve

Steph Wissink

Thank you.

Operator

Grom Haskett. Next Gordon is Chuck with

Chuck Grom

X% operating Anne, Hey. for XXXX. in forecasting Question of margins you are

I X.X%. a few when X% can you to on the back can But a ago. look you think to -- hold said that bigger get up level as reductions the to there’s picture, cost the all a to hands get our back potential get you you can think there? needs X% that What up like to were years to made? And topline also with you’ve follow you

Anne Bramman

you refer so the our about we of early just we shared recovery at and some Investor to you information event with Chuck, in back when Yeah. February. think the

well, puts tried -- what how I to pace figure deliver so as the a continuing also customer think of as we from and watching to environment, cost things of this. and as lot are knowing or to these some through And demand, a a not on think of from far out recovery but in there’s pace. do So takes both the we was

pace. we’re deliver. and timing We’re going very just confident the to It’s

and in you level similarly, So as we expenses, to profile XXXX. draw XXXX attention that, in that deliver topline it your cost had ran exceed we go the would I some scenarios we billion through this, And for margin. same reductions the X% would $X order to similar overhead you about in thing the is than a with the our had margin from out require we EBIT that and laid took that those less well if we sales February

about well costs right some really demand of macro as to that it’s the as now wins we’re recovery, working we’re that seeing So the offset.

we’re -- would I So point. working say that timeframe a get don’t for to finite you. have number just But to actively that

Operator

of America. Next is Lorraine Hutchinson Bank with

Lorraine Hutchinson

Good Thanks. afternoon.

for the moment, Rack able the from spring level and to you carryover of at content the season? are Just you and inventory summer fourth with then focusing move quarter Rack a through the into were products on -- happy move are completely? you as you And

Pete Nordstrom

Yeah.

was load Rack. pretty the intro shape in good with Our

of some inventory through stuff to continue Rack in works relative levels. processes We shape we typical But end-to-end our the through good current have our that’s stores work we’re in Nordstrom to what and through. of way might that the its work

think I the happening sales trends improving especially there. are that considering

your amount based Rack of way we the moment time, the have of And But looked not going we’ve well, question ended sorry, of supply Rack? QX. into need what and we -- is was so last the as quarter. on on the at And second I that hit inventory part I’m in

Lorraine Hutchinson

happy of just inventory if the content was with about, and I level fall? enter curious you’re and spring you as

Pete Nordstrom

thing. I the Again, Yeah. think, it’s same

through it. in around everywhere lead up shore that inventory, and the evolve. going to advantage We’re commitments increase that speed, things needs consciously our flexibility these can times are that’s going work to on be thing demands particularly agility where in in we’re us to to that as over advantage we we’re we and all theme working The is customers channel, that on time tend working

Anne Bramman

and compared at what happening. clean had -- really when seen we we we level, add line our through coming And what the versus at when prior is it levels, going inventory clearance, Nordstrom through it brand COVID is pre-COVID that, as we’re started from in to what Rack look exactly as what’s it with to transfer QX. to far from versus we on just to with look a And

Michael Maher

And one we’ll more now take question.

Operator

question last BMO Our is Markets. Siegel from with Simeon Capital

Simeon Siegel

afternoon, Thanks. Hey. Good everyone.

to you do markets, Is -- are own quickly levels? XXXX to And up? just follow outperforming how and own then Just business? difference clarify think think percent dropship expect about versus you any way about as large get how that that sales and to the on markets then how can you there to other relative a for profitability the Thanks. booked difference you those their your or of the and store Racks a inventory to

Erik Nordstrom

a say we stores a of On gap who levels. the number performance regional now haven’t will markets, are of I there. their XXXX by bit still broken have yeah, we have it’s our -- XXXX. But a we right exceeding out outperforming against

direction. in the So it’s trends all the right --

Anne Bramman

bit to to wholesale the private be that you I time which it next think our far years, the of moving dropship be to of laid the some model, would As that. and is be being out. the label we three a part little about our assortment and of of of we up Nordstrom had or alternative Investor partnerships, materials over to dropship would five remainder refer would as reframe event piece, branded about mix going Over differently the XX% be goods XX% years

partnership But would and to on journey that for alternative of journeys. this what journey profitability the the our look first in at particular of fulfillment I it. our customer kind So a this is what average is very bit above is -- say of and much other phase component some is line of we the of the

Simeon Siegel

of lot Great. rest the of Thanks of Best guys. a luck you. for

Anne Bramman

Thank you.

Michael Maher

will We for interest A in Nordstrom. one along want on our available the slide to be and remarks with call. your prepared today’s Thank for you replay joining presentation website. for thank you year

Operator

teleconference. today’s concludes This

you at lines your disconnect participation. may time. Thank for this You your

Nordstrom (JWN) 26 May 212021 Q1 Earnings call transcript