Nordstrom, Inc. ver: 2

Q1 2021 Earnings Conference Call

5/25/2021

spk_1: Reading And welcome to the Nordstrom first quarter 2021 earnings conference call at this time. All participants are to listen only mode. We will begin with prepared remarks followed by a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded at this time. I'll turn the call over to Michael Mayer, chief accounting officer for Nordstrom. You may be in
spk_2: good afternoon and thank you for joining us. Today's earnings call will last 45 minutes And we'll include approximately 30 minutes for your questions.
spk_0: Before we begin.
spk_2: I want to mention that we'll be referring to slides which can be viewed in the investor relations section on Nordstrom
spk_0: dot com.
spk_2: Our discussion may include forward looking statements.
spk_0: So please refer to the
spk_2: slides with our safe harbor language participating in today's call, our eric Nordstrom chief executive officer and, and bremen chief financial officer who will provide a business update and discuss the company's
spk_0: first quarter performance.
spk_2: Joining during the Q and A session will be Pete Nordstrom, president of Nordstrom, inc and chief brand officer. And now I'll turn the call over to ERIC
spk_0: Good afternoon and thank you for joining us today. We're pleased with our results in the first quarter, which were marked by improving sales momentum and continued progress in our transformation as we work to unlock the full potential of our digital first platform as demand continues to recover our unique product offering and connection to our customers. Place us in a strong position to capitalize on this opportunity and we're confident in our ability to capture market share and drive profitable growth as consumers resume activities including social events, travel and return to work. Our top line trends increased sequentially for the third quarter in a row, with improvements in both Nordstrom and Nordstrom rack supported by recovery in stores as covid restrictions were lifted and continued growth in digital sales trends reflected broad based improvement across businesses, regions and merchandise categories, both in store and online Stores and markets that have opened up earlier. Outperformed other markets by 7 to 10% points, giving us increasing optimism about the pace of recovery As we look to the remainder of the year. Our performance in the quarter reflects solid execution toward the growth priorities. We laid out at our investor day in february. Women are most important markets, broaden the reach of Nordstrom rack and increase our digital velocity, starting with our priority to win in our most important markets. Our market strategy helps us engage with customers through better service and greater access to product no matter how they choose to shop. We successfully expanded the rollout to 10 new markets, including Atlanta, Houston Detroit and Minneapolis. Over the last three months. Market strategy is now in place in all of our top 20 markets, Bringing an unmatched level of convenience in connection to customers who make up about 75% of our sales. We continue to scale the enhanced capabilities. We launched in 2020 like the expansion of order pickup and shipped to store to all Nordstrom rack stores With order pick up more than doubling compared to the first quarter of 2019. In addition, nearly one third of next day order pickup volume for Nordstrom dot com and our top 20 markets was picked up at rack stores since launch as we continue to integrate our capabilities across, are too powerful brands. We also continue to evolve our approach to get closer to our customers than ever before this quarter. We made significant progress expanding our personalized styling programs with new tools deployed in the first quarter to allow our salespeople to offer our customers highly relevant recommendations, both in store and digitally. More than 50% of our sales people are now utilizing these remote styling tools, A 10% point increase compared to just a quarter ago. We also introduced new livestream shopping events featuring some of our best brands. We delivered significant growth from these initiatives in the quarter and are on pace to meet our milestones for the year. Our second growth priority is broadening the reach of Nordstrom rack In the quarter. Total rack sales declined 13% to 2019. A 10% points. Sequential improvement from the fourth quarter. Importantly, the merchandise repositioning across price, hybrid and brand doors is progressing in spite of some challenges managing slower than anticipated inbound inventory flow. We remain in the early innings in these initiatives are progress is encouraging increase
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