JWN - Earnings call transcript Q1 2022

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

Operator

Greetings, and welcome to the Nordstrom First Quarter 2022 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. At this time, I'll turn the call over to Heather Hollander, Head of Investor Relations for Nordstrom. you. Thank

begin. may You

Heather Hollander

thank joining and you afternoon us. for Good

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

update forward-looking discussion the Safe Financial Officer; Nordstrom, discuss and Chief And our Participating and Chief statements, Our Officer; language. a who include so refer will Nordstrom, slide I'll Harbor are to call now, today's first Chief call Brand Pete company's Anne Officer, quarter to please provide in Executive Erik. over Bramman, with the Erik business the and may President performance. turn

Erik Nordstrom

afternoon and Good you thank us today. joining for

to quarter progress occasions that Nordstrom growth were results strong by matter and most first to in top We continued transformation. them. line look for Our our the marked customers know

we quarter, events, social and This anticipated long customers for such saw in-person office. as occasions return to travel shopping

Beyond their reevaluated and also refreshed wardrobes. occasions, customers

this our an well product to the serve model by experience, We interconnected favors were demand opportunity, positioned it the encouraged our by service. powered commitment our customer model. and offering, of deliver and and customer are capabilities this business strong We service because of excellent to categories unique core core

store customers was our the traffic Putting service level were proud, XX% staffed, spirit was clearly satisfaction store And continue well and our to unwavering with to teams choose physical shop continue be experience our and ready Nordstrom first is stocked improved We've as believed in in customer our increased. reaching shift together. in serving That and $X versus customer in that as channel commitment digital quickly for outstanding delivering We integrated team their the Our and adapt employees go customers, the increasingly and always like selling to reflected more XXXX. store. We more be delivered serve sales exemplify our dedicated thank million we'd to this productivity, and to allow assets enable and us nimble team's to to quarter, XXXX DNA, salespeople quarter. cannot reflected us an that in in mark customers to the results. our scores. that to

quarter first milestone. increased and XX% over merchandise sales Nordstrom Turning increased gross Total XXXX. GMV, quarter over pre-pandemic year performance. quarter Nordstrom first prior banner the of to levels, increased first versus year. sales XX% important an the value, for last exceeded the XX% or banner

broad-based and and urban activity saw pre-pandemic city we reached to experienced geographies. a core across their and we customer return As traffic With categories rebounded sales wardrobes, collectively centers, growth occasions and store customers Nordstrom updating levels. in returning

year-over-year Nordstrom In fact, had growth among our quarter. the sales this Manhattan stores flagship store the highest

US spread Nordstrom outperform pre-pandemic the compared but to Northern the Southern levels, to X continued the tightened banner, US percentage points. For the to

grew traffic, XX% team Nordstrom Our and inventory serve and Nordstrom on increasing Rack, increased better year, Starting in-stock versus chain to remains and improving performance, three and improved our capabilities supply sales Rack optimizing levels. areas; flow. customers emphasis profitability focused with better value, drive key conversion, additional by particular on with building store driven last shareholder

balance and we are sales also at rack. premium needs, the a the customer assortment of quarter. of By with with points through fine-tuning as align our We move we price better supply increasing momentum built to brands achieving increasing better our

Reasons affinity, brands of brand drove to which Nordstrom growth. results brands before, believe top we campaign, we've of the of and And XX% we're and will Rack with work to our availability at are those improve the at awareness, improved pleased Rack's fuel As sold the said our Nordstrom traffic. Rack, More

most right to year, our through selection traffic As driving both and remainder and brands coveted have we our business hold grow carry that customers plan of we benefits we vendors continued use Rack and are the from as new of multilayer we confident increase to want. the source see of the from By well and pack our as offerings expect we move expand we ensure to that will inventory improving our the profitably optimizing awareness inventory throughout our brand levels, the year. assortment our

produce the quarter, while focused are that incremental the elevated as both the supply improvements and year. in to improvements Pete move to plans will a drive fulfillment, customer and rest move deliver streams and margin we profitability, optimization in growth to margin Turning take Within drove year. SG&A, will as chain plans the merchandise drive topline underway we efficiencies will which you we to we we labor date merchandise and in on compound improvement moment. additional and SG&A through experience, supply flow-through through progress expect chain work and the enhance through of our this

most our in our In and to Starting important markets. strategic for three to advancing and most areas areas. addition key I've our are capabilities progress important outlined, us, we that continue the winning digital with make winning priorities these markets in in focus

in-store QX, expanding Online, have higher engagement one our pickup Our don't deliver market most XX% omnichannel and interconnected our a our market better seen customers how experiences. In-Store offering of comprising customer customer power a market store scale highest and order XX linking and and than additional rollout, By also product, us spend the to strategy an utilize journey more quarter, top enjoy. level, a matter over pickup clearly capabilities prior half at the to Pickup utilizing shop. pickup strategy service next-day with Rack our Customers In increase in they Throughout of stores times fleet we pickup choose model, markets. helps XX we've continue Customers access profitable strategy convenience capabilities we'll strong to Nordstrom.com no by our demand leveraging basis and through that XXX our of who Buy engage greater to with customers order this three the service. value level options. additional market satisfaction versus of connection of customers points remains year. and our our the

to be Our a You we and connections styling to build Closer also convenience deeper program engagement driver customer deliver as strategy. through powerful our continues

to our Trunk and we further in As styling sunsetting belief move commitment that redirecting and resources program tell position these Club value the I to dedicated want our be services. services to This are clear. and we most. they styling investing we for are growth, reflects our customers us growing our and to

high services to with which relationship a styling satisfaction have channels from We low-touch high-touch range a customer and scores. inspiration a personalized all our of achieved digital of through outfit stylist,

towards of we that drive to either and well-positioned investment stylist, customer when our with a directing programs seven online. these higher levels serve growth. are spend ensure to in-store or report engaging satisfaction more We Customers times are and needs

digital While we rapid still our growth are within see the we seeing highest our styling, customers engaged number in-person with services. of

continued our the We the connect our relevant to science and digital customers customers. of and for capabilities continue this with With our to for to business second penetration more of empower anniversary sale digital We'll were customers part excited in the about in-store sales part XXXX. versus We're platforms as leverage an transformation. through making their recover. personalization our especially stores leverage and quarter digital opportunities are digital on we're data continue flat in events and us strong of capitalize plans the strategy the stylists progress quarter. as assets to deliver Digital on experience. virtual our to in we our with market Investments remains at demand returning upcoming overall including important position and with market year XX% tools, digital put our to highly a advance important to favorable scale, style an recommendations our boards quarter, first

Beyond in merchandise margin and improving driving growth, we streams drive we've the second the have incremental of year. place line top work half SG&A made and improvement efficiency, in to specific progress

it Pete. line in the sharing to have to financial look to turn I'll remain over value of creation. We and With event progress at We XXXX targets continued forward our our that, outlined sight ahead. to quarters shareholder the investor committed achieving

Pete Nordstrom

good category we to and both performance. flow Strength this last especially to were quarter. had ready matter to women's suiting strongest pre-pandemic broadly, improve supply selection best apparel Thanks, model. double-digit Starting product updating their that for exceeded and evolve with and merchandising serve gross by the them were driven inventory over Erik, that across this our afternoon, More with women's in apparel then performance customers an this and our excited and them. growth and year was to sales give levels. events dresses. I'll apparel you about start men's We and men's and Men's talking quarter, increase was brands the quarter most and category the chain and our update margin, work closets our shopping everyone. and by category on see

categories, and of business. true is While we significant always that and important are strive portion for balance all relevant it occasion-based a event our our represent to customers categories across

good also we differentiated best help as occasions, this apparel styling look The We saw feel occasions. and services and important offer beyond to prepare alterations quarter such customers their that they as though. for goes demand

seasons. especially Shoes refreshes, and and growth athletic formal, spring robust strong across with We summer increased styles. demand for also demand had the for a saw wardrobe casual double-digit

significantly across perform also and posting levels. strong Our very above double-digit to well, categories sales designer offering continued growth all pre-pandemic

do, and put the center experience, our the chain in initiatives and in customer profitability. to increased we now supply Turning resulting We strategic optimize initiatives. designed everything at are of our the customer to merchandising

improving continued we merchandise quarter, our This our progress margins. in

analytics to Our optimize find advanced and better assortment needs, our opportunities team customer presentation and used understand to markdowns. improve

assortment for year. rest To average of QX of provide for also and category very prices insights the analytics increased also the retail part our to our encouraged curated transaction negative the improve a most decision-making the volumes. opportunities without and allocation relevant identified around customers, additional and of using we've by as We on our seeing assortment We're results consumer inventory. impact we're work our

operational also we're supply capabilities, supply flow. strategic industry. working amid especially facing We merchandising of broader and our critical the inventory the supply importance chain, our challenges and Beyond on recognize chain chain

our we across efficiencies service which opportunities to network our capabilities, As improve customers. identified ultimately a improves to and result,

have in flight. four initiatives We

consistency through improving predictability and flow the First, of our unit network.

productivity and distribution centers. fulfillment increasing Second, our in

customer We And in-store as actions increase for will markdowns improve speed. as market same-day and the finally, the level expanding selection delivery accelerating experience, drive reduce pickup. these shopping Third, and savings. expense sell-through, next-day believe well

work do, expect encouraged and the in still significant by early While of year. this more half to benefits second we see we are results, we have to

customers. experience. a our and in-person shopping provide this first ways is a the stores, offer new ASOS in continue women's selection GMV plans we also co-branded designed by The models men's This to retail response improve continue Friday, as this beyond partnership. a new choices adult XX% evolve customer of quarter launch compelling to We're We in and merchandising Grove In representation wholesale partnership styles summer. Alternative physical later forward brand. our while brands with store newness select to location represented the with expanded launches. for customers' ASOS opening ahead we partners. we the are and new Angeles quarter, also increasing engage this great Allbirds' relevance. to Nordstrom partnering also with model of the partnership key on our We banner Los at are launch, will sustainable legacy Allbirds, shoe brand fashion one ASOS our be the of few in excited we've young X, model. and had to excited first And opportunity launching will a to second June we Nordstrom full specifically retail Nordstrom.com Beginning about last

with choice We and high share QX wallet offer to analytics are choice while to existing continue count entered our with count, both grow new more to relevance. management our increasing process We use choices record customers. and and category we'll enhance expanding

excited events the customers of wardrobes. to As are anniversary serve and that our the ahead we at their event our benefit the they believe we to from return update sale look second and they to timing will as quarter,

events limited reduced at event, anniversary and from make insights consumer engages year. and to past each our opportunities and sale for to product identify year, of our a customers always, more time. data we profitable continuous the even brand-new compelling improvement best new identify for To As loyal an look deliver the prices the brands rewards with using most science components and successful upcoming

year's to inform leveraging depth to breadth analytics for For example, and this profitable advanced the offers we're of drive right sales event.

we're We focusing With an customer bringing and tracking better and effort will sale, have new experience. anniversary forward flow coveted launching in-store which catalog. we expect brands, into digital enhanced an pulling on considerable a also year's this receipts, improved result sell-through put and highly product anniversary and inventory new in allocation, and events back

are provide to new a and Nordstrom. in our us customers efficiency it and deliver the over with confident to an results. opportunity transform our for unique anniversary for excited better to about work productivity. introducing to our experience and underway, our are even customers, improve approach closing, ability now customer We we our the our Anne turn to while loyal to business, experience discuss I'll In financial

Anne Bramman

of corporate interest to excluding of charge a sale begin Thank Pete. After a you, our $X.XX office EPS with Club a first $X.XX. and adjusted of through diluted loss were the share. related take in our results, like per I'd for for Trunk the the review you our property, quarter a building to impairment gain a an outlook then of on the was year. Earnings remainder

quarter first expect projected $X.XX exceeding compensation, impacted tax Nordstrom traffic, of customers net sales in related primarily stock-based XX%. store sales quarter, to rate not banner by the in-stock levels. first in quarter. expenses, improved of conversion in Rack and negatively as discrete year impact by share pre-pandemic increased our increasingly increased the increased Nordstrom which quarter earnings sales better chose per XX% first do XX%, the to XX%, with increased GMV Digital increased were Overall, to shop Our compared first to while XX% levels. we full due to flat store. were XXXX, driven sales both

in retail banners, raised response through minimum in Rack, impact items the lowest we vendors. pricing inflationary pressure our our quarter price this Nordstrom took actions, we we contemplated both on from these higher guidance, our and to pricing increases prices MSRP saw At As strategic unit elasticities. actions. from with Across prices

cost growth growth. have shift adversely the base. our spending, by impact and resiliency was not pressures quarter, higher we actions, profile transaction income due supported to inflationary pricing customer which we our of this favorable This point, sales At is customer and mix seen believe

This improved XX%, merchandise forward lower margins quarter, increase percentage largely receipts. profit increased occupancy pricing due markdown as points, versus customer Ending driven the and impacts one-quarter favorable year. increased basis buying to leverage of both XXX to approximately on and of per Gross customer pull inventory due by counts increased spend and prior the rates. Sale with costs of net inventory Anniversary sales primarily and a

to improve tracking earlier, indicated, Pete product which flow receive As of inventory we we have anniversary taken improve steps sell-through. will our expect and and

As we upcoming the basis on a of Sale. percentage as leverage to result, decreased we XXX in sales. sales believe quarter, our due are Anniversary Total points net well higher primarily positioned for a SG&A first

in deliver been continue offsets since to we've our and we through and see chain to working fulfillment, However, pressure last optimization initiatives. year supply labor

corporate After X.X% our building Trunk office Club chain charge, we supply year. was build as first from impairment a the benefits gain that expect for the margin EBIT optimization the in We sale X.X%. quarter. margin move EBIT was will through of the adjusted interest excluding sales of on the and

post strengthen full billion liquidity, new scheduled million ending revolving cash The we milestone credit. in including first to to our pandemic, continue revolving that $X.X and a agreement, expire million entered our available flexibility as capital agreement in $XXX $XXX structure in forward. the $XXX XXXX. additional new financial This into was of September improving the on position, in line available with go million the previous replacing we another is credit We month, quarter agreement our providing

to begin outlook. macroeconomic our the XXXX. turning contemplated backdrop our for to fiscal outlook by I'd Now, updated like describing in

base. momentum To-date, is haven't business we spending adverse customer to as an prepare and on We higher encouraged for of their the suspect pressures, impact be occasions. profile we update our customers customer from income seen long-awaited which wardrobe continue in inflationary to by the due our

all We same continue pronounced including initiatives. chain in labor At benefits our factored and fulfillment, guidance, with we the continue optimization both to consider our reflect guidance. while supply performance, headwinds, rest and of assumptions factors the see for exceeded Taking quarter chain to along the customer of into impacts and holding our cost guidance second year, the quarter with consistent first supply macro-related we to these consideration, are inflation which as topline margins. offsetting expectations, updating our to the our disruption we our well potential which macroeconomic XXXX to into our from more as time, our pressure previous

For XXXX. versus now fiscal year we revenue of X% X% to growth XXXX, expect

X% of X.X% We the continue margin to to full EBIT year. approximately expect adjusted for

the will similar in leverage levels said, Improvements Our the assumes year-over-year on of second higher margin of strategic to will our EBIT margin from leverage gross the contributors build in driven sales, we EBIT forecast margin XXXX be which throughout be the profit XXXX. first year SG&A adjusted that significant half both profit and margin. improvement year initiatives, by and both All benefits in improvement between SG&A of year. to expect compared gross the especially and and adjusted first halves will

effective be XX% $X.XX for now is the year. We rate expect Our of tax $X.XX. EPS to adjusted expected approximately to fiscal

outlook quarter. the of second on impact half quarter some of growth for excludes anticipate detail any second provide I'd approximately quarter. that the our additional be like will share Our revenue repurchases. that first to We forecast the also

Sale shifting points quarter. to basis Our of include into of quarter, which week approximately our one projections the impact growth the revenue the of Anniversary adds XXX second

X%, at expenditures capabilities. normalized chain investment growth. the to our levels with rate planning and allocation, serve our levels of Shifting and be that customers EBIT to our business is capital margin second in XX%. expect will better supply roughly XXXX to rate technology in to X% approach support capital our We're first year line of primarily priority our and quarter that We long-term tax will support full

reducing leverage. priority second our is Our

an remain credit to to committed track are end rating decrease XXXX. the our to leverage times X.X ratio investment-grade by We on approximately and of

to is priority Our third returning shareholders. cash

dividend. last quarterly resumed cash per declared week, cash share. we quarterly Directors our quarter, And our This a dividend of Board of $X.XX

million the Board cash to most the right serve customers see closing, made measured categories. approach with pleased moments shift and repurchase plan this share program. reengaging authorized In a We to that Our new a and well-prepared aligning and also momentum customers are very we business matter conditions. the this We share our for in are to to we flow market our take $XXX investments prepare year, in repurchases with to core our to them. our

very We momentum and Heather in business our the over long-term. deliver I'll are excited the With that, value our Q&A. for about shareholder plans over turn it to to

Heather Hollander

Thank you, Anne.

we Before that Q&A, one to asked limit we their responses started with question participant’s and get one follow-up.

to session. now will Q&A We move the

Operator

time, be Our we’ll At line of Instructions] [Operator question-and-answer with the question this first session. Chen from Oliver comes conducting Cowen. a

may proceed You your question. with

Unidentified Analyst

much But Hi would taking labor but [ph] levels, there. and environment. Katy sales to sort Chen. side, for that just margin for seeing so gross on question. is sales of, margin XXXX seeing This know or love Thanks more you're about how equal cost our gross Oliver of and to on you're those. cost sales inflation. as We just, fulfillment are the Obviously, the below SG&A

to you in to get needs the XXXX So Thank to gap What margin could gross order level? the back bridge you. there? happen

Anne Bramman

Erik And to Hi, from financial a chime then if start welcome macro, from and Katy, a to. bit a about in want than they’re Pete perspective. off talking this more little I'll

we we component it. of the through needed knew were to markdown to in inventory heavier for about with coming some the QX, talked we As that work and

against and two say QX factors us in the situation. through really markdowns clearing good our So we've gotten the compare we've EBIT of that some ourselves had, of for one, we would a biggest I are; XXXX. margin

and and feel of and a and we worked a -- are situation their a really the everyone's -- lot, but and is the coming I -- update we serving returning responding driving people as some categories inventory business inbound coming seen styles QX customers say we to And have our pockets the the offer. really perspective. from of the worked where in majority out wardrobes perspective the back really think, to through we've our is. really that sales margin what for range just of the costs, it. on ready little about We of I are wide from of office. that I occasions. freight and demand shopping to to very inventory. pleased to We were stepping And bit customers QX, at the in component customer this this, prepared product we're with looking back coming address, a that through see our sales were to the is, cost second They're general, for would our in gross well. of a is on resiliency there's are formal We think for What good

productivity labor we've talked that we year, also we, you're guide. and that some in have chain in the some inflationary our seen try about, address seeing and contemplated else, costs. from As our and to guidance, seeing supply which started everyone last working like to to It's throughout offset fall. early pressures We started

Unidentified Analyst

very much. you Thank

Operator

next from the of with Evercore Our ISI. comes Omar Saad line question

You your may proceed question. with

Omar Saad

nice refreshing on the same where and better, that like stand the in maybe roughly bit we It's opportunities. seeing dive bring quality the of area. the been as improve for…? little Can a little inventory, of several of It flow update you quarter. bit I'd Rack? deeper Rack. Thanks to reward the But inventory, I new fashion better people last some merchandising an maybe are the on you your a of flow us got Good quarters, for especially guys segments Really to start bit access little business growth inventory, sounds think you laggard in taking the my the you love a that a for there, some give question. among mentioned morning. around

Anne Bramman

Great.

think you. I Erik So Omar, for going to is question address that

Erik Nordstrom

Omar. with question, Rack results. the pleased Yes. Thanks We're for our

achieve to, and QX as year quarter-after-quarter, communicated, sequential was we and improvement year Our really that. back did going have last going in plan the

which I looking prices. for And sauce the those and touched to which the you your customers really inventory We for is brands average those than a more our talked getting our we mix think about, question is our these price are down on drove one, to us business, the business year, focus brands that identified for. Rack we clear making brands get. for at come areas last what we've the of think better big innings That's really back, content in that's the to would with are were much say starting we're not back on a of secret harder want in is we've price I but helping coveted position points. early specifically, is progress. still all the As initiatives. good on more what way, getting But light were of our great

of thought more populated we headwinds have Another stores talked of it headwinds have that to having there's Rack, Rack office A certainly areas an last in affects were QX, tailwinds our those just QX, areas should we of densely year, it piece I lot and in and the as in turned component. what well. geography commented, participates -- experiencing affects category-wise, we more, where and pandemic, more too, look Nordstrom at urban-type banner, both you

really for well best more home that. looking from category as that. set out more and up about their they benefit more, mix As the we care customers And is leave are our

traffic. of addressing talked is we've is part Rack piece that big about The in other the business a Rack So

increase traffic the quarter. over did Our

And We momentum throughout than improved previous each encouragingly, also a month being better saw the conversion, built the quarter, better levels. month. little in-stock our

to some the I point good triple We're but in building feel We've chain. that. hurt supply packet that's still not that not a to double And and up, Lastly, immune of bumpiness been inventory lean -- felt just there pre-pandemic. having to last certainly were from we out upon. year inventory a out lot we we we hold the had there's size about that, access

inventory, and about. feel good that having So pack we hold

Omar Saad

Erik. Thanks,

Operator

Chuck Gordon the Grom with from comes of Haskett. question next Our line

You may your question. proceed with

Chuck Grom

thanks Hey, very much.

terms today handicap pre-COVID Just the I you me want for how be versus the guess one of one brands you in quick guys the editing where on to assortment mix would levels? versus premium them Rack. of

Erik Nordstrom

Can Chuck, the Chuck. first question. of -- Sorry, repeat question? you the didn't can you get your get part I

Chuck Grom

was Sorry, mute. I on

handicap guys do today the in you where an terms could to Just mix time? want you premium of assortment versus of that be brands over

Erik Nordstrom

to merchandisers, They isn't back are and not talked quite felt our back our back way, at XX%. the the brands, way premium so it's -- precise price most the the about number, this access of a and but number, Yes. these to of having they’re -- all I've coming [ph].

room think and that still to So improve. we there's there, some go we've seen to continue

Operator

Our comes BMO with next Simeon Capital Siegel from line of question the Markets.

your You question. may proceed with

Simeon Siegel

the what was then, the the benefit it Thanks. you. Congrats quantify and margin grows, for And margin ASP you're expansion. What merch on Thank Hey. margin within year the full can partnerships? the quantify in you the quarter? growth you maybe, in Good afternoon, you lastly, embedded everyone. growth merch just alternative the this from guide? And then quarter just Anne, planning second as received can just

Anne Bramman

Yes.

general, the both top vast as I Rack majority was ASP improvements, line the our mix, on the Nordstrom just well. banner. transaction in category say, And both growth So -- by as said increased would ASP as we the and component, also well

both you together, those -- all three drivers, for really banners, are the the that when in growth So big was combine QX.

a supply basis we it, week that the the there's when last expect swing talked half really EBIT to -- SG&A we're really going our merchandise about anniversary as to for gross that thinking margin of first improvements. margin. sale being profit on impactful year the really are for to in the half of QX really levels. through, benefits margin leverage leverage year, the our in be for general, from those gross in start the profit way that pulling in what strategic to the quarter. and the is XXX the And -- another far driving that guidance maybe then, our receive And chain higher margin point compared building in year. really we components second we initiatives then second both more the it's quarter and was the approaching flow look our the throughout the same and going gave, we year, at roughly but year, XXXX we'll the margin we As this and then And It's sales, initiatives, of about just on especially around

to so, we about EBIT XXXX. And margin and of second the compared between similar improvement, levels think it's improvement half first the when adjusted really

Simeon Siegel

Great. alternative Thank through grows, as the you. does partnerships? on that And how does flow then benefit? just I -- work the assume that so

Anne Bramman

Yes.

So the GMV, can big that the But capital. a as you the different and is us -- it way about of the relationships, we think this end It selection about choice. was the was talked multiple driver quarter. really in the we that, our customers a it for well as -- have of at for on higher that, It's better return invested helps imagine. we day, a choice

what so, typically flowing see it's contribution what call And you through margin. we is,

in contribution the some hit at But Some on looking the we're day, at margin. revenue, return of of it some the margin. contribution of the hit it end the

Simeon Siegel

the for a of Thanks the of Best luck year. Great. rest lot.

Anne Bramman

Thank you.

Operator

Michael question Binetti comes of the Our Suisse. from with next line Credit

your proceed question. You with may

Michael Binetti

much first versus do for And freight? detail and into how maybe excess Anne, half you could half guidance see baked here understand help when us Thanks all the the impacted second quarter improving? the for Hey. you the you freight today. that on what the first

Anne Bramman

Yes.

going in well We as chain chain we cost cost on both And I'll specific -- labor the and items. that we well. we assume as What as line back to offsets headwinds for about So far in mentioned, from for did, our supply and the last what you did how -- what early are saw refer productivity. we initiatives through this freight fall. as particular a improvements did bake our trying going year But each thinking and that identify as as on. we and inflationary I supply we're productivity given our to on guidance, we worked started we starting is, haven't we just

through impact year that And continue well. so the see we to coming as

pressures, an saw a cost we just this on I trends our encourage already this you through lot last coming seeing year we're we the contemplated is what -- continued think and from in the as would that perspective. about inflationary fall from guide. assume far And As

Michael Binetti

shape think year. If in the look to the of coming ask the business the out XX% think to and XX% total as in try the compare more half the at of Sale there's the we of lower that I COVID Anniversary XXXX. in XXXX, pre-COVID in And little becoming to Anniversary And to second this I for I Anniversary could being the half try a Sale think about pre-COVID? to EBIT at a business second getting XXXX just follow-up, business date, of half versus was it is back Sale for XX%. I'm a if change general, But normalize I little we're eyeballing weighted we

Anne Bramman

No, about I rates we've EBIT think consistent our half second talked pretty we're first from in what was and half. improvement seeing

in in general, But shift the that one, anniversary half between we're curve, bit. half Sale just, similar But huge so half things half pretty rate two. seeing improvement in two. given certainly the little one, way a is a -- guidance costs the yes, business. we've we're again, is EBIT It's not And particular, in the the shift Anniversary around

Michael Binetti

Okay. Thanks lot. a

Operator

next of comes Sole question UBS. with Jay from line Our the

with You may proceed your question.

Jay Sole

but was XX about looks if QX that's the on statement I QX much. just you the basis the in margin wondering like because guide implied you implied could previously so what for EBIT lower than Thanks for just XX Great. guidance to implied. gross clarify know the addressed points margin this, was it

if are decrease you. in embedding wondering for just Thank what in QX? driving gross the you gross margin I'm margin the is So,

Anne Bramman

our coming to as the of from And the coming the in what general we as then going but expecting have that through Sale gross leverage piece. well remind second we're we're margin you, can say the is do improvement as well as Anniversary just some guidance, item give quarter. an initiatives to a line I in specific not both Yes, SG&A seeing Jason, as perspective from well productivity in

have second XXXX been margin And about the rate do the same as levels. quarter the talk QX And will we trying approach is what then is so think QX. say piece, we growth EBIT about when about topline guide, the which to really half we

you to So, we're specific I not line enough go gives but that getting think items, on.

Jay Sole

Thank That’s it. Got helpful. you so much.

Operator

of of America. Our with question comes from Bank line Brian Callen next the

with your proceed question. You may you may Brian, proceed question. with your

Our next line question of with Kogan Tracy comes from the Citigroup.

You may question. your with proceed

Tracy Kogan

guys. you Thank

don't year. wanted levels last secondly, just in? talked did through expected a year do And price full able off-price were work were you if the because then the favorable ask And of to markdown about if too about it's you think performance that the that sales it said favorable last you if having note it. to a just I to to better Thanks. I curious most quarter you I what expected just last able I to think at much you I your inventory and than digital you rate was going had or was at versus while that favorable little were to you ago know business.

Anne Bramman

Yes.

to as a in this was thought from from we well. So, a going markdown Pete it But markdown be. perspective, what perspective, weigh let would about I'm on it

year this For favorability lot rate year. than have a were from as and bit that last on we well. was a better the -- quarter, to didn't move last We able little better

we What XX% the for On the break out is, typically digital that component, will was banner. it I by quarter, don't about say penetration.

this it's for as be agnostic -- as stores just driver important customer of in frankly, what We very we we part to and how us to that's quite a digital bigger shops anticipated. see continue growth experience expect a we're this is to a to long great general, a pretty business. for expect our them. But And continue year,

Tracy Kogan

Great. Thank you.

Heather Hollander

Nordstrom (JWN) 24 May 222022 Q1 Earnings call transcript