Nordstrom Suffers Sales Decline, Countering Cash Flow Gains
(Bloomberg) -- Nordstrom Inc. said it generated positive operating cash flow in the second quarter, but that didn’t ease the sting of a deep, coronavirus-induced drop in sales. Shares fell in late trading.
- Sales fell 53% in the quarter as the pandemic lockdown robbed the retailer of half of its operating days versus the same quarter a year earlier. However, the company said its operating cash flow was $185 million -- one positive sign for a company that has sought to reduce cash burn. Nordstrom also said merchandise margins improved.
- CEO Erik Nordstrom said the retailer’s balance sheet is now stronger as it rides out the pandemic. The company is “pivoting to prioritize market share gains and profitable growth as we advance our strategies,” he said in the statement.
- Online sales declined, apparently due to the delay of Nordstrom’s typical summer sale from July to August. E-commerce sales have spiked for many retailers as shoppers buy while they’re hunkered down at home.
- The fashion retailer has kept a low profile in recent months as the pandemic shuttered nonessential stores and reshaped consumers’ priorities in a short period of time.
- Executives say they’ll be able to cut at least $500 million in costs this year, minus those related to Covid-19, as part of their streamlining effort.
- Nordstrom shares fell 7.7% at 4:24 p.m. in late trading in New York. The stock has fallen 62% this year through today’s close.
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