Nordstrom (JWN) Q2 2025 earnings summary

Executive summary

• Net sales reached $3.8 billion in Q2 2024, up 3.4% year-over-year, with adjusted EPS of $0.96 and digital sales growing 6.2% to represent 37% of total sales.

• Nordstrom Rack led growth with net sales up 8.8% and comparable sales up 4.1%; 11 new Rack stores opened year-to-date, with further expansion planned.

• The Anniversary Sale saw strong participation from loyalty members and contributed to sales growth, with a timing shift benefiting Q2 by about 100 basis points.

• The company is focused on digital-led growth, operational optimization, and expanding the Rack banner, with private brands and top categories like active, women's apparel, beauty, and kids driving performance.

• Board is evaluating a potential going-private transaction; no assurance of completion and no update provided.

Financial highlights

• Gross profit margin improved by 155 basis points to 36.6% on strong regular price sales and improved shrink.

• Adjusted EBIT margin rose to 6.4%, while reported EBIT margin was 5.0% due to a $54 million supply chain asset impairment charge.

• SG&A as a percentage of net sales was 34.4%, or 33.0% excluding the impairment charge.

• Free cash flow for the first six months was $354 million, up from $258 million a year ago.

• Ending inventory increased 8.3% year-over-year, mainly to support Rack and digital growth.

Outlook and guidance

• Fiscal 2024 revenue expected to range from a 1.0% decline to 1.0% growth, including a 135 basis point headwind from the 53rd week.

• Comparable sales for 2024 projected to be flat to up 2% year-over-year.

• Adjusted EBIT margin guidance is 3.6%–4.0%; adjusted EPS expected in the range of $1.75–$2.05.

• Effective tax rate expected at 27%.

• Guidance reflects caution due to external uncertainties and the importance of the second half for profits.