Blake Anderson: Thanks so much.
Operator: Thank you. Next is Michael Binetti with Evercore. Please proceed with your question.
Michael Binetti: Hi, guys. Thanks for taking our question. I want to just, you might have said something to Dana about what you’re seeing in the current quarter just because I think the — there’s a little bit of wood to chop through some of the normalizations here for the 53rd week in Canada, but I think it embeds a little bit of an acceleration in the underlying rate. I wanted to see if that was something you’re seeing today. You might have mentioned that it was something related to the — you’re feeling better about the content of inventory heading into the holiday. If you don’t mind just talk about for a minute let us know what you’re seeing. And then I just — I also want to zero on the SG&A, the 100 basis point run rate kind of rolling off, you said you got another 50 in this quarter.
It didn’t sound like you were suggesting at that kind of level of 50 basis points would go forward. Is there any reason that wouldn’t — the 50 that you saw this quarter wouldn’t continue for the next few quarters? And maybe just a few comments on what the new 50 basis points from what you guys are actually able to do as you did work on the supply chain. Thanks.
Cathy Smith: Good afternoon, Michael. So on the first one, sales drivers, as we shared, we’re pleased first off to drive more profitability on fewer sales year-over-year. So we’ll start there with just the quality of earnings continues to have seen strength. And it’s really around all of the initiatives we’ve been driving. But with regards to the drivers of the sales, it’s clear that customers are responding to newness and promotion, as Pete shared in the prepared remarks. And we’re seeing it in a couple of things the actions like our 5x beauty to our Nordy Club members and the free two-day shipping as we move into the holidays is really resonating, I think, with our customers. So great progress there with newness and promotion.
On SG&A, what’s the new 50 basis points, I like the way you asked that. So as the supply chain has continued to drive improvements now for a number of quarters. It will just be more, more challenging to lap those improvements. And so I would expect those to start to moderate over time, we’re seeing really good progress across every element of the supply chain, but those will start to moderate. And we’ll continue to work to offset the other lines of SG&A with productivity and initiatives.
Michael Binetti: Thanks a lot for the help. Congrats and good luck into the holiday.
Cathy Smith: Thank you.
Operator: Thank you. Our next question comes from the line of Oliver Chen with TD Cowen. Please proceed with your question.
Oliver Chen: Hi, Erik, Peter and Cathy. Regarding the two banners, as you think about Full-Line as well as Rack, what would you say are key aspects to positive comping and returning to growth just more generally or specifically and also as we think about the e-comm channel. And Cathy, as we look at the credit card income, just what are some key variables you’re assuming in terms of the next quarter and also perhaps like the framework from which that may differ if you have any thoughts. Thank you.
Erik Nordstrom: Hey, Oliver. This is Erik. Let me start on the Rack banner. We definitely see Rack as a growth vehicle for us in a couple of ways. And one just kind of our core strategy that I touched on of great brands, great prices, getting that assortment right. And that’s an evergreen subject. We always have opportunities to get that mix better and better. And our teams have done that. I would say when we were really pouring the gas on there is having more and more dedicated roles there. So you saw our announcement of Gemma as Rack President that follows earlier that we really have built out a separate Rack buying team there. So we think we’re better positioned to be more agile and really get the product mix, right? The second part Rack growth would be around new stores.
We see a lot of opportunity to add profitable new Rack stores. And we’ve been opening up more this year. We have more planned for next year and we’re getting really great returns out of those investments there. And again, we see lots of runway there to keep add new stores. The other piece is really around the digital part and omnichannel capabilities that rack.com affords us. And as you know, there’s really not many players in the online off-price space. It’s a hard business to be profitable at. Our rack.com business is profitable, and that was really the first step of leveraging that asset is to get to profitability. Now we’re there, we see more opportunity around profitability. But we see opportunity to leverage that capability to engage with customers more and more.
And so we have a path forward of a lot of omnichannel capabilities that we feel good about driving some growth there. In the Nordstrom banner, I really would start with our digital business there. We see opportunities are well underway of having different inventory models that allow us to bring greater selection on the digital journey, whether we own the merchandise or not. So having other models to bring selection to our customers is kind of step one. Step two is then using the data capabilities we’ve been building out to curate that larger offer for our customers. But in the end, it’s about winning on the discovery journey for customers and having a flow of newness is important. But having that selection and being able to offer up the right curated offering for customers on their journey is super important as well.
