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Nordstrom Gives More Optimistic Outlook With Rack Outperforming 

Shoppers inside a Nordstrom store in Toronto, Ontario, Canada, on Tuesday, March 21, 2023. Nordstrom will close its six Canadian department store locations and seven Nordstrom Rack shops, as CEO Erik Nordstrom said the company no longer sees a realistic path to profitability in the country, The Canadian Press reports. Photographer: Cole Burston/Bloomberg (Cole Burston/Bloomberg)

(Bloomberg) -- Nordstrom Inc. offered a rosier view for the current year’s sales following better-than-expected results at its discount chain, the latest indication that shoppers are pivoting to off-price options as they hunt for deals.

The Seattle-based department store operator sees comparable sales in a range of flat to rising 2%, up from from the previous projection of down 1% to up 2%. It also raised the bottom end of its revenue guidance. Sales in the second quarter narrowly beat the average estimate of analysts compiled by Bloomberg. 

High inflation and interest rates are helping to drive consumers to off-price retailers, which has lifted the results of companies including TJX Cos Inc. and Ross Stores Inc. Target Corp. also reported better-than-expected results last week as lower prices sparked higher traffic. 

Nordstrom said sales at its Rack chain rose nearly 9%, which was more than the market expected. The result may assuage investors who have been concerned about Rack’s inconsistent results. The company added that its annual anniversary sale helped results at the its namesake brand. 

Shares of the Seattle, Washington-based retailer rose 9.7% at 4:40 p.m. in extended trading in New York. Nordstrom shares have gained 15% this year through Tuesday’s close, trailing the 17% gain of the Russell 1000 Index. 

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