Nordstrom (JWN) Q3 2025 earnings summary

Executive summary

• Q3 net sales reached $3.35 billion, up 4.6%-5% year-over-year, with comparable sales growth of 4% at both Nordstrom and Rack banners.

• Adjusted EPS was $0.33, up from $0.25 last year, while net earnings were $46 million ($0.27 per share) due to higher costs and non-recurring charges.

• Digital sales grew 6.4% and represented 34% of total sales, marking the fourth consecutive quarter of positive net sales growth.

• Customer count and purchase trips increased, with particular strength among higher-income cohorts.

• Focus remained on driving growth in both banners, operational optimization, and expanding the Rack footprint.

Financial highlights

• Gross profit margin improved to 35.6%, up 60 basis points year-over-year, driven by strong regular price sales.

• SG&A expenses were 36.6% of net sales, up 25 basis points, mainly due to higher labor costs and a $14 million technology depreciation charge; adjusted SG&A was 36.2%.

• Adjusted EBIT margin was 2.9%, up 45 basis points year-over-year.

• Ending inventory increased 5.9%-6% year-over-year, mainly to support Rack growth and seasonal categories.

• Free cash flow for the nine months ended November 2, 2024, was $78 million.

Outlook and guidance

• Full-year revenue expected to be flat to up 1%, with comparable sales growth of 1%-2%.

• EBIT margin guidance is 3.6%-4%; adjusted EPS expected between $1.75-$2.05.

• Income tax rate expected at approximately 27%.

• Guidance reflects caution due to late October sales softness and a shorter holiday season.

• Approximately 30% of annual net sales and 40% of EBIT anticipated in Q4.