Arguably Nordstrom's most important few weeks of the year (outside of the holidays) appear to have started on an upbeat note as shoppers rebuild their closets for post-pandemic return to offices, restaurants, bars and vacations.
This week Nordstrom kicked off its big annual shopping event, dubbed the 'Anniversary Sale,' for members of its 'Nordy' loyalty program. Nordstrom says 80% of the sales from the 2020 Anniversary Sale came from loyalty club members.
Nordstrom CEO Erik Nordstrom told Yahoo Finance Live he is "encouraged" by the start to the event.
"But the timing [of the event] just really fits as the country is opening up and customers are looking to get out in stores and in particular, are looking for something new to travel, for back to school, back to work or even just going out to a restaurant. We are seeing a lot of interest in newness," Nordstrom said.
The sale, which opens up to the wider public on July 28 and runs through Aug. 9, promises 100-plus new brands such as Club Monaco and Billabong.
The company has held the sale every year going back to the 1960s.
Investors are banking on the Anniversary Sale going well for the luxury department store retailer as it works toward hitting its financial targets.
Earlier this year at a closely watched investor day, Nordstrom outlined 2021 sales growth of 25% year-over-year and “positive” operating profits as it also benefits from more streamlined costs. That would bring Nordstrom's sales this year to $13.4 billion, just below 2019's level (aka pre-pandemic) of $15.5 billion.
Over the long-term, Nordstrom sees revenue growing by a low-single digit percentage from 2019 levels (pre-pandemic) and operating profits increasing at a faster pace than sales.
"We are intrigued by Nordstrom's recasting of its model to balance physical/digital 50/50 with higher contribution from new/alternative revenue streams, localize trade areas to improve cost efficiency and customer experience, and more aggressively pursue growth in [Nordstrom] Rack. If progress unfolds as it could, the shifting mix should contribute to higher sales growth at up mid-single digit percentage and margins above historical levels (6%+)," wrote Jefferies analyst Stephanie Wissink in a recent note.
Wissink rates Nordstrom shares at Buy with a $48 price target. Shares are up 4% this year to $32.22, lagging the S&P 500 as investors await confirmation on the company's sales and margin recoveries.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
What’s hot from Sozzi:
Former Bridgewater Associates co-CEO: CEOs should shape up on ESG, or ship out
AMD CEO: the semiconductor shortage will take time to correct
Kansas City Chiefs phenom Patrick Mahomes: I am trying to build a business empire
Coca-Cola CEO: our business is rounding the corner from the pandemic
Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, and LinkedIn.
