Nordstrom, Inc. has recently released its 10-K report, providing a comprehensive overview of its financial performance and operations for the fiscal year 2024. The company, headquartered in Seattle, Washington, is a renowned fashion retailer that offers a wide range of apparel, shoes, beauty products, accessories, and home goods for women, men, young adults, and children through various channels, including Nordstrom branded stores, online platforms, and Nordstrom Rack stores.
In 2024, Nordstrom reported net earnings of $294 million, equivalent to 2.0% of net sales, and earnings per diluted share (EPS) of $1.74. The company's adjusted earnings before interest and taxes (EBIT) stood at $593 million, accounting for 4.1% of net sales, after excluding charges related to supply chain asset impairment, technology depreciation, and privatization fees. Total company net sales increased by 2.4% compared to 2023, with a 3.6% growth in comparable sales. Notably, women's apparel, active, men's apparel, kids, and shoes experienced the strongest growth in 2024.
Nordstrom's strategic focus in 2024 was on three priorities: driving Nordstrom banner growth, operational optimization, and building momentum at Nordstrom Rack. The company's efforts to drive growth at the Nordstrom banner resulted in a 3% comparable sales growth in 2024 and over 5% in the fourth quarter. The operational optimization initiatives included lowering per unit costs in the supply chain, expanding RFID technology, and improving inventory integrity. Nordstrom Rack also saw expansion with the opening of 23 new stores in 2024, contributing to increased sales and profitability.
In terms of financial performance, Nordstrom's total net sales for 2024 amounted to $14.6 billion, with digital sales accounting for 36% of the total. The company's gross profit increased to $5.2 billion, representing 35.5% of net sales, primarily driven by higher sales and improved inventory productivity. However, selling, general, and administrative expenses (SG&A) also increased to $5.1 billion, accounting for 35.2% of net sales, mainly due to higher labor costs and certain charges. Despite the increase in expenses, Nordstrom's EBIT margin improved to 3.4% in 2024, compared to 1.8% in 2023.
Nordstrom's effective tax rate for 2024 was 25.3%, higher than the 8.6% rate in 2023, primarily due to additional tax benefits related to the wind-down of Canadian operations and the favorable resolution of certain tax matters recorded in 2023. The company's diluted EPS for 2024 increased to $1.74, reflecting the positive impact of higher sales, despite charges related to supply chain asset impairment, accelerated technology depreciation, and privatization fees.
Looking ahead, Nordstrom, Inc. announced a pending merger in December 2024, where it reached an agreement to be acquired by members of the Nordstrom family and Liverpool. Upon completion of the transaction, the company's common stock will be delisted from the NYSE, and Nordstrom, Inc. will become a private company.
As a result of these announcements, the company's shares have moved 0.2% on the market, and are now trading at a price of $24.35. For the full picture, make sure to review Nordstrom's 10-K report.
