Pete Nordstrom: Relative to the women’s apparel, we make good progress there, and it feels like a broken record part. A lot of that has to do with just having our inventory levels to be in the right spot. We’ve had good success and we learned a lot through Anniversary Sale, which is a huge advantage for us being able to get that kind of read on what’s going on and how to be able to predict a little bit what’s going to pen the fall. But the dressed up looks for us really across the board in men’s and women has been good. But I think about women’s like selling a third piece, so it’s a jacket or it’s a sweater. That business has been really strong. I think particularly in the contemporary types of categories, if you look at that price level and with those types of brands, we’ve had a good – really good solid business, and we feel great about that.
We feel like we’re on a positive trajectory with women’s apparel. The other thing I’d say about women’s apparel and the Rack, it’s a disproportionately important category there. And that’s another place where we just – we have a lot more efficiency with our inventory. We’re focusing on those strategic brands, you might make up a much higher percentage of our inventory ownership and so that inventory is working for us better. So if we can continue to smooth up the flow and respond to the newness that goes with that, be opportunistic in the Rack, in particular, we’re in good shape. You mentioned the younger customer. I mean it feels like that’s a bit of an evergreen opportunity. We need to do better with the younger customer and we have plans to do that.
I think our own label programs are going to be a big part of that. I wish we could flip the switch and change that overnight. But as you know, these things take a little while. But I like where our plans are with that and what we’re trying to accomplish and how that’s going to appeal to young customer, both with style and price. But I think that’s a good opportunity for us. And then in ’24, we should be able to see improvements to that young customer business that will be accretive to our total women’s business.
Oliver Chen: Okay. Thank you. And a follow-up, as we zoom out a bit, you do have advanced data analytics platform as well as AI within your IT. What are you thinking about your merchant organization and how that can get faster and test read and react and how that can intersect with the analytics capabilities you have to just drive more inventory agility overall?
Pete Nordstrom: This is Pete. I mean relative to AI and analytics and all that, it has to go without saying, I guess that, that is a key element to success in retailing. I mean we’ve got to be able to raise data and I think whatever tool technology brings to the party that allows us to be faster and more agile. We learned nothing else with COVID – that’s the kind of stuff that we need to invest in. And we talk a lot here about how technology becomes an enabler for all things we do, but particularly in merchandising. So I don’t have anything to announce or declare here other than we’re staying close to that, and we’re always looking for ways that we can improve our efficiency and effectiveness and merchandising.
Cathy Smith: Maybe the only thing I would add on is, as all companies right now, and particularly all retailers, too, our team has been working for some time on great data platform. So we have a lot of richness there and are now starting to apply AI in all the places you would expect, everything from enhancing the customer experience to the operational capabilities to the merchant organization, like you just said, probably a long way to go, but I think everyone is putting some real energy around it.
Operator: And our last question comes from the line of Matthew Boss with JPMorgan.
Matthew Boss: Great. Thanks. So Erik, at the Rack, with the strategic brand penetration target now reached, what do you see as the time line from here for Rack to return to positive top line growth? Maybe just help us to think about incremental opportunities that you see to drive continued top line improvement at the Rack banner multiyear as we think about price mix or categories?
Erik Nordstrom: Yes. We – as we’ve mentioned, we see continued sequential improvement, which you play that out, that gets us to having increases by the end of the year. And we see the Rack banner overall being a growth driver for us. One part of that is new stores, but we do see comp store growth coming. The strategic brand, it’s part of the power and effectiveness for us has been in simplicity. But it is a bit of a blunt instrument. As you get within those strategic brands, they’re not all created equal. And it varies with seasons. So within that mix of strategic brands, we’re in a position to move quickly and invest in those brands that are performing better. So it’s not just about hitting a number of 65% of our sales are in strategic brands.
It is – we continue to see opportunities within that chunk to have more productive inventory. And there’s a lot of opportunities out there in off-price. And we have our inventories in a position to where we can be on offense and we have the focus directionally where we want to go. So we see those growth opportunities ahead of us and that they’re sustainable.
Sara Penner: We want to thank you for joining today’s call. A replay, along with the slide presentation and prepared remarks, will be available for one year on our website. Thank you for your interest in Nordstrom.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
