NORDSTROM INC (JWN)·Q4 2025 Earnings Summary

Executive Summary

• Q4 FY2024 (reported March 4, 2025) delivered adjusted EPS of $1.10 and EBIT of $273M, with gross margin expanding 290 bps to 37.3% on cost-method markdown timing, improved shrink, and lower loyalty promotions; GAAP EPS was $0.97 and EBIT $242M .
• Versus Wall Street, EPS materially beat the Zacks consensus ($0.90), while revenue was reported at $4.323B; Zacks noted revenue of $4.32B modestly missed its $4.33B consensus (methodological differences across sources) .
• Comparable sales rose 4.7% (Nordstrom +5.3%, Rack +3.5%), with Rack net sales up 1.2% and digital representing 38% of sales; total net sales declined 2.1% year-over-year due to the prior-year 53rd week (ex-53rd week, net sales +2.5%) .
• No FY2025 guidance and no Q4 conference call due to pending go-private transaction; a quarterly dividend of $0.19 per share was approved on Feb 26, 2025, and CFO Catherine Smith is stepping down after filing the 10-K .

What Went Well and What Went Wrong

What Went Well

• Gross margin expanded 290 bps to 37.3% on favorable markdown timing under cost accounting, improved shrink, and lower loyalty promotions; EBIT margin rose to 5.8% and adjusted EBIT margin to 6.5% .
• Comparable sales growth of 4.7% for the quarter, with Nordstrom banner +5.3% and Rack +3.5%; Rack net sales +1.2% (+6.6% ex-53rd week) and digital sales accounted for 38% of total sales .
• Management message of agility in the holiday environment: “responding in real-time to better serve our customers and drive strong financial results” – Pete Nordstrom; “maintained momentum… at the high end of expectations” – Erik Nordstrom .

What Went Wrong

• Total net sales down 2.1% year-over-year due to the prior year’s 53rd week; Nordstrom banner net sales -3.7% (flat to +0.5% excluding the 53rd week), highlighting softness in full-line stores despite comp strength .
• Ending inventory up 11.4% vs. the same period last year (vs. net sales -2.1%) driven by growth in top brands and higher in-transit inventory late in the quarter, raising near-term working capital risk if trends slow .
• No FY2025 outlook and no Q4 conference call due to pending transaction; reduced external visibility is a headwind for estimate-setting and investor confidence in near-term cadence .

Financial Results

P&L and Margins vs Prior Periods and Estimates

Note: Nordstrom did not host a Q4 conference call and did not provide FY2025 guidance due to the pending transaction .

Segment Net Sales (Quarterly)

KPIs

Guidance Changes

Earnings Call Themes & Trends

Note: No Q4 call was hosted; trends reflect Q2 and Q3 calls versus Q4 press-release commentary.

Management Commentary

• “Customers responded positively to the strength of our offering across both banners in the fourth quarter… maintained the momentum we built throughout the year, which resulted in full-year sales and profitability coming in at the high end of our expectations.” – Erik Nordstrom, CEO .
• “Our team reacted with agility and speed to the holiday environment, responding in real-time to better serve our customers and drive strong financial results.” – Pete Nordstrom, President .
• Company will not provide a fiscal 2025 financial outlook or host a fourth quarter conference call due to the pending transaction; quarterly dividend of $0.19 per share declared for payment March 26, 2025 .

Q&A Highlights

Note: No Q4 call was hosted. Select highlights from Q3 (Nov 26, 2024):

• Margin structure: CFO noted margin expansion driven by regular price selling; expected further year-over-year improvement in Q4, while acknowledging promotional environment risk .
• Rack strategy: continued store opening cadence (12 in Q3; 20–25 per year) and rollout of store fulfillment for Rack digital orders in 100+ stores to improve availability and speed .
• Outlook tone: Cautious on late-October slowdown, noting Q4’s outsize profit contribution (~40%) and maintaining prudence on revenue and comps guidance cadence .

Estimates Context

• S&P Global consensus was unavailable via our tool mapping for JWN; as a result, we reference external consensus from Zacks/Nasdaq. Zacks: EPS $0.90 and revenue ~$4.33B; Nasdaq/Zacks preview noted revenue forecast at $4.29B and EPS $0.90 heading into the print .
• Actual results: Adjusted EPS $1.10; total revenues $4.323B; net sales $4.204B; therefore, EPS beat consensus materially, while revenue was roughly in-line/marginally below depending on source methodology .

Key Takeaways for Investors

• Margin trajectory improving: cost-method markdown timing, shrink remediation, and loyalty promo optimization drove outsized Q4 margin expansion; sustainability will hinge on inventory discipline and promotional environment through spring .
• Same-store momentum is constructive: Q4 comps +4.7% (Nordstrom +5.3%, Rack +3.5%) validate brand assortment strength across banners; Rack continues to grow on an adjusted basis (ex-53rd week) .
• Working capital risk: inventory +11.4% YoY into a period without guidance raises risk if demand cools; watch sell-through and in-transit normalization in Q1 .
• Corporate actions limit visibility: no FY2025 outlook and no call due to pending transaction; expect reduced external cadence until the process is resolved; dividend maintained at $0.19 .
• Near-term trading: Expect reactions to margin upside and EPS beat tempered by revenue ambiguity across consensus sources and elevated inventories; stock catalysts tied to transaction developments and spring seasonal sell-through .
• Medium-term thesis: Rack growth, digital penetration (38%), and margin recapture are positives; execution on inventory and promotional balance is key to sustaining EBIT margin above 6% adjusted levels .

Appendix: Prior Two Quarters (for trend)

• Q3 FY2024: Net sales $3.347B; GAAP EPS $0.27; adjusted EPS $0.33; gross margin 35.6%; adjusted EBIT margin 2.9% .
• Q2 FY2024: Net sales $3.785B; GAAP EPS $0.72; adjusted EPS $0.96; gross profit % 36.6%; adjusted EBIT margin 6.4%; digital sales 37% .