By Dhirendra Tripathi
Investing.com – Nordstrom (NYSE:JWN) stock soared 27% while Abercrombie & Fitch (NYSE:ANF) shares lost almost a tenth of their value in Wednesday’s premarket trading, reflecting the companies’ respective delivery on analysts’ expectations of them.
Nordstrom said it expects to be in a position to return cash to shareholders in the ongoing quarter. For the fourth quarter ended January 29, net sales jumped 23% to $4.49 billion as the retailer made sure that Americans returning to work after two years of the pandemic found its upscale apparel and footwear on the shelves.
Inventory levels at the end of the quarter were higher than planned, but the company said it aims to reduce the levels relative to sales in the current quarter.
The retailer has earlier attracted flak for the underwhelming performance of its off-price Rack division and its inability to ensure its stores were sufficiently stocked. For the Nordstrom Rack banner, net sales jumped 23%.
Margins expanded at the company due to narrower discounts and tighter cost control. Nordstrom forecast 2022 revenue to rise 5-7%.
That compares favorably with the 2-4% growth forecast at Abercrombie which had $3.7 billion in revenue in 2021. Abercrombie is also guiding for a hit to margins due to inflation after its struggles with product shortages in the recent quarter, an outcome many retailers face due to pandemic-induced capacity curbs at key supply centers in China, Vietnam, and elsewhere in Asia.
Net sales in the fourth quarter rose 4% to $1.2 billion but remained below the pre-pandemic levels. Adjusted profit per share fell 36 cents to $1.14.