Nordstrom, Inc. reported second quarter net earnings of 126 million dollars and earnings per diluted share of 77 cents. Excluding costs associated with the wind-down of Trunk Club, the company reported adjusted earnings per share of 81 cents.

For the quarter, net sales increased 12 percent, exceeding pre-pandemic sales levels, and gross merchandise value (GMV) increased 12.2 percent.

However, citing low consumer demand, the company has lowered its sales and earnings forecast for the full year.

"We delivered solid results in the second quarter, with top line growth, increased profitability and continued progress in our strategic initiatives," said Erik Nordstrom, chief executive officer of Nordstrom, Inc.

Nordstrom posts sales rise across banners

The company attributed the increase in sales to anniversary sale timing shifting from the third quarter to the second quarter, which had a positive impact of approximately 200 basis points on net sales compared with 2021.

During the quarter, Nordstrom banner net sales increased 14.7 percent and GMV increased 14.9 percent. Net sales for Nordstrom Rack increased 6.3 percent.

In the second quarter, the company said, men's apparel had the strongest growth versus 2021, and shoes, women's apparel and beauty also had double-digit growth, as customers updated their wardrobes and returned to occasions. Total anniversary event sales increased 5 percent, including one day of the event that fell in the third quarter.

"As we look to the second half of the year, we are aggressively right-sizing our inventory while investing in supply chain and merchandising capabilities that will benefit us in 2023 and beyond," added Pete Nordstrom, president and chief brand officer of Nordstrom, Inc.

Nordstrom lowers outlook

Updating its financial expectations for fiscal 2022, the company added that it now expects total sales to increase in the range of 5 to 7 percent compared to the previous outlook of between 6 to 8 percent.

Ebit margin as percent of sales is expected to range between 4.5 to 4.9 percent compared to 5.8 to 6.2 percent previously, while adjusted Ebit margin is expected to be between 4.3 to 4.7 percent compared to earlier estimate of between 5.6 to 6 percent.

Earnings per share if forecasted to range between 2.45 to 2.75 dollars against prior outlook of between 3.38 to 3.68 dollars and adjusted EPS is expected to be between 2.30 to 2.60 dollars compared to 3.20 to 3.50 dollars earlier.

"While our quarterly results were consistent with our previous outlook, customer traffic and demand decelerated significantly beginning in late June, predominantly at Nordstrom Rack. We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses to recent trends, and we remain confident in our ability to deliver on our long-term strategic and financial goals," added Erik Nordstrom.

The board of directors has declared a quarterly cash dividend of 19 cents per share to be paid to shareholders of record at the close of business on August 30, 2022, payable on September 14, 2022.