Executive Summary

Q3 results were solid: net sales $3.35B (+4.6% YoY), diluted EPS $0.27 (adjusted EPS $0.33), with gross margin up 60 bps to 35.6% on strong regular price selling; comps +4%, GMV +5.3%, digital +6.4% (34% mix). Rack net sales rose +10.6% while Nordstrom banner net sales rose +1.3% .
Guidance nudged up at the low end: FY24 revenue now flat to +1% (prior -1% to +1%) and comparable sales +1% to +2% (prior flat to +2%); EBIT margin/EPS ranges maintained (EBIT margin 3.0–3.4%; adjusted EBIT margin 3.6–4.0%; EPS $1.40–$1.70; adjusted EPS $1.75–$2.05) .
Execution highlights: 12 Rack openings in Q3 (23 YTD), launch of BOPUS and store fulfillment at 100+ Rack stores, continued RFID rollout, and Marketplace scaling to 300+ sellers; management emphasized “great brands at great prices” driving Rack momentum .
Caution flags: noticeable late-October sales slowdown and a shorter holiday season; inventory up 5.9% YoY (above sales growth) with quality described as healthy; liquidity remains strong ($1.2B available; ~$397M cash) .
Near-term stock catalysts focus on holiday sell-through, Rack omnichannel (BOPUS/store fulfillment) ramp, and shrink improvements amidst continued operational optimization .

What Went Well and What Went Wrong

What Went Well

Broad-based top-line and margin expansion: total comps +4%, gross margin +60 bps to 35.6% on regular-price sales; “customers responded to newness” and key brands across banners, with digital +6.4% .
Rack momentum and expansion: Rack net sales +10.6%; 12 Q3 openings (23 YTD), with omnichannel enhancements (BOPUS and store fulfillment at 100+ stores) to serve convenience-oriented off-price customers .
Tech/ops progress: RFID rollout and supply chain speed gains (e.g., >40% improvement in returns processing speed) driving better customer experience and margin outcomes .

What Went Wrong

Demand deceleration: “noticeable decline in sales trends towards the end of October” against a shorter holiday (five fewer days between Thanksgiving and Christmas) .
Inventory a touch high: inventory +5.9% YoY versus +4.6% sales; cold-weather categories (boots/sweaters/outerwear) lagged in some regions amid warm weather .
Shrink still elevated: while improving slightly, shrink “remains at all-time highs,” limiting the pace of margin expansion .

Financial Results

Income Statement Summary (USD Millions, except per-share and %)

Metric	Q1 FY2025 (May 4, 2024)	Q2 FY2025 (Aug 3, 2024)	Q3 FY2025 (Nov 2, 2024)
Net Sales	$3,221	$3,785	$3,347
Diluted EPS	-$0.24	$0.72	$0.27
Adjusted EPS	-$0.24	$0.96	$0.33
Gross Profit Margin %	31.6%	36.6%	35.6%
SG&A % of Net Sales	35.8%	34.4%	36.6%
EBIT Margin %	-0.6%	5.0%	2.5%
Adjusted EBIT Margin %	-0.6%	6.4%	2.9%

Segment Net Sales (USD Millions)

Segment	Q1 FY2025	Q2 FY2025	Q3 FY2025
Nordstrom (Full-line + Digital)	$2,040	$2,514	$2,077
Nordstrom Rack + Last Chance + Rack Digital	$1,181	$1,271	$1,270
Total	$3,221	$3,785	$3,347

KPIs and Mix

KPI	Q1 FY2025	Q2 FY2025	Q3 FY2025
Total Company Comparable Sales	+3.8%	+1.9%	+4.0%
Nordstrom (banner) Comparable Sales	+1.8%	+0.9%	+4.0%
Rack Comparable Sales	+7.9%	+4.1%	+3.9%
Digital Sales Growth	-0.2%	+6.2%	+6.4%
Digital as % of Net Sales	34%	37%	34%
GMV Growth	+4.9%	+3.5%	+5.3%
Ending Inventory YoY	-6.3%	+8.3%	+5.9%
Liquidity (Avail.)	~$1.2B	$1.5B	$1.2B
Cash & Equivalents	$428M	$679M	$397M

Guidance Changes

Metric	Period	Previous Guidance (Q2 FY2025)	Current Guidance (Q3 FY2025)	Change
Revenue (incl. credit)	FY2024	-1% to +1% vs 53-wk FY2023	Flat to +1% vs 53-wk FY2023	Raised low end
Comparable Sales	FY2024	Flat to +2% vs 52-wk FY2023	+1% to +2% vs 52-wk FY2023	Raised low end
EBIT Margin	FY2024	3.0%–3.4%	3.0%–3.4%	Maintained
Adjusted EBIT Margin	FY2024	3.6%–4.0%	3.6%–4.0%	Maintained
EPS (Diluted)	FY2024	$1.40–$1.70	$1.40–$1.70	Maintained
Adjusted EPS	FY2024	$1.75–$2.05	$1.75–$2.05	Maintained
Effective Tax Rate	FY2024	~27%	~27%	Maintained

Note: Management commentary also referenced an EBIT margin range “of 3.6% to 4.0%,” which aligns with adjusted EBIT margin in the formal guidance tables; we cite the explicit 8-K guidance tables above for consistency .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 FY2025)	Current Period (Q3 FY2025)	Trend
Supply chain optimization, speed	Focus on consistent inventory flow; asset impairment from halting a PNW omni center; RFID rollout underway	>40% faster returns processing; continued RFID benefits; improved delivery/fulfillment speed	Improving
Rack growth and footprint	11 new Racks YTD by Q2; plan to open 12 more; mid-to-high teens IRR on new Racks	12 opened in Q3; 23 YTD; continued store whitespace opportunity	Expanding
Off-price omnichannel (BOPUS/store-fulfillment)	Not yet at Rack in Q2	Launched BOPUS and store-fulfillment in 100+ Rack stores; inventory accuracy key via RFID	New capability scaling
Digital/Marketplace	Marketplace launched; +15k items, ~100 brands; digital +6.2% in Q2	300+ Marketplace sellers; digital +6.4%	Scaling
Shrink	Slight improvement off highs	Still at all-time highs; improvements needed for long-term margins	Stabilizing from elevated base
Demand/macro/promo	Q2 Anniversary Sale on plan; customer count/trips up	Late-Oct slowdown; shorter holiday; expect promotional Q4 per normal seasonality	More cautious

Management Commentary

Erik Nordstrom (CEO): “We delivered solid results with net sales reaching over $3.3 billion, along with earnings per share of $0.33… Both Nordstrom and Nordstrom Rack delivered 4% comparable sales growth… digital sales growth of over 6%.” . “There was a noticeable decline in sales trends towards the end of October” .
Pete Nordstrom (President): Women’s apparel (Vince, Veronica Beard), active (On, HOKA, Vuori) and shoes drove Nordstrom banner growth; private brands (Nordstrom, Zella, Open Edit) delivered double-digit growth; inventory slightly high, with cold-weather categories slower in some regions .
Cathy Smith (CFO): “Total company net sales increased 4.6%… Gross profit… expanded 60 basis points to 35.6%… Our EBIT margin expanded 45 basis points to 2.9%… We ended the third quarter with $1.2 billion in available liquidity, including just under $400 million in cash” .

Q&A Highlights

Margin expansion drivers: top-line growth is the biggest lever; supply chain/technology efficiencies and shrink reduction are key to multiyear EBIT uplift .
Rack omnichannel: BOPUS/store-fulfillment now live in 100+ Rack stores; RFID-driven inventory accuracy is an enabler; expected to support sales, margins, and CX .
Inventory and weather: inventories slightly above preferred level; cold-weather categories (boots/sweaters/outerwear) were slower amid warm weather; plan to stay clean into spring .
Rack growth runway: model ~20–25 new Racks per year; under-penetrated relative to peers; convenience-led catchment (15-minute drive-time) supports local demand .
SG&A leverage: at ~2–3% inflation backdrop, SG&A leverage typically begins around ~1% comp at Nordstrom banner; Rack new stores aid top-line leverage .

Estimates Context

Wall Street consensus (S&P Global) was unavailable via our feed at this time due to a temporary mapping limitation; therefore, we cannot provide versus-consensus comparisons for Q3 FY2025 performance or forward quarters. We will refresh when the S&P Global mapping is restored [tool limitation acknowledged].
Company guidance implies modestly higher FY24 revenue/comps at the low end, with margin frameworks unchanged; given late-October softness and a shorter holiday, consensus adjustments may focus on Q4 cadence and gross margin sustainability (mix/promotionality) .

Key Takeaways for Investors

Rack is the growth engine: double-digit Rack net sales growth, accelerating store openings (23 YTD), and new omnichannel capabilities (BOPUS/store-fulfillment) should support traffic conversion and margin via better unit economics and inventory productivity .
Digital momentum is durable: +6.4% digital in Q3, Marketplace scaled to 300+ sellers, and ongoing search/discovery enhancements improve conversion and choice count .
Margin path intact but dependent on shrink and mix: gross margin improved on regular-price sell-through; further EBIT gains require continued shrink normalization and operational gains .
Inventory quality is healthy though levels are slightly elevated; clean-up in weather-sensitive categories and strong holiday execution are important near-term drivers .
Guidance bias modestly constructive on revenue/comps; watch Q4 cadence (shorter holiday, election/ macro noise) and promotional intensity; management staying prudently cautious .
Liquidity is solid ($1.2B) and cash ~ $397M, providing flexibility through peak season and store growth plans .
Context: Post-quarter, Nordstrom completed a go-private transaction (May 20, 2025) with the Nordstrom family and Liverpool; common stock delisted May 21, 2025, with new capital structure and ABL facility put in place .

Appendix: Additional Q3 Items

Dividend: Board approved a quarterly dividend of $0.19 (payable Dec 18, 2024; record date Dec 3) .
NYC Flagship Holiday Activation: “The Blizz on 57th Street” experiential campaign to drive traffic/engagement .

NORDSTROM INC (JWN)·Q3 2025 Earnings Summary