As Nordstrom reported its fourth quarter financial results, the company made changes at the top, including the appointment of Erik Nordstrom as CEO and the pruning of its board.
In the quarter, Nordstrom recorded net earnings of $193 million, or $1.23 per diluted share, versus $248 million, or $1.48 per diluted share, in the year-earlier period.
Nordstrom noted that fourth quarter earnings per diluted share reflect non-recurring charges of 19 cents. Adjusted for that, earnings per diluted share of $1.42 missed a Zacks Investment Research analyst consensus estimate of $1.48.
Net sales were $4.44 billion versus $4.38 billion in the year-prior quarter, as revenues advanced to $4.54 billion from $4.48 billion. In its full-price business, including department stores, net sales increased 1% while those at off-price stores gained 1.8% and those in the digital operation grew 9%, which represented 35% of sales in the period year over year. Online order pickup contributed more than half of digital sales growth in the full-price business, Nordstrom maintained.
In the full fiscal year, Nordstrom recorded net earnings of $496 million, or $3.18 per diluted share, versus $564 million, or $3.32 per diluted share, in the year earlier. Net sales were $15.13 billion versus $15.48 billion in the fiscal year earlier, as revenues slipped to $15.52 billion from $15.86 billion.
Nordstrom also said the company would transition from a co-president structure to a sole CEO, with Erik Nordstrom to serve in this role. Pete Nordstrom has been named as the president of Nordstrom Inc. and chief brand officer. They both will remain on the company’s board of directors.
The board is also changing. The company stated that current board members Kevin Turner and Gordon Smith would not seek re-election at the expiration of their respective terms at the company’s annual shareholders meeting on May 20. In addition, Nordstrom plans to shrink the board from 11 to 10 over the next two years and introduce a 10-year term limit for independent directors.
“Through our customer focus, inventory efficiencies and expense discipline, we drove improvement in sales trends in full-price and off-price, and we increased profitability during the second half of the year. Our 2019 results reflected the accelerated roll out of our market strategy, our strength of Nordstrom Rack’s execution, improved merchandise margins and realized expense savings that were 10% above our plan,” said Erik Nordstrom, CEO, Nordstrom, Inc. “As we move forward, we are further leveraging digital capabilities and scaling our market strategy to drive sales and earnings growth. The momentum from our investments and market strategy is enabling us to get closer to customers, transforming the way we’re serving them.”