Nordstrom, Inc. (NYSE:JWN) Q3 2023 Earnings Call Transcript

Peter Nordstrom: Yes, Pete. I’ll start on the designer part. I think relative to what’s happening, the trend is normalizing and stabilizing. And if you look at it over that — the multiple year stack you talked about it, we’re still doing more business in designer now year-to-date in ’23 than we did year-to-date in ’19, for example. So while it has come back from some of the heights that we had in the last couple of years, I guess, we would view that really more as normalizing. And I think that’s natural given the big run-up we had there for a while. It’s an important part of our business. We continue to invest in. And I think for us is making sure we get the inventory levels in a good spot, so we can have that flow in newness. I think particularly in that business, it’s important that we keep having new things to show customers, and we’re getting a healthier position in that regard every month that goes forward.

Cathy Smith: And with regards to markdowns, maybe I’ll take it to a little bit bigger perspective, which is gross margin first. And that is we’re really pleased with the gross margin improvements we’ve delivered this year for the whole year. And then that’s really been largely driven by our inventory productivity priority. Our Q3, 35% gross margin rate is a historically healthy rate for the third quarter. And then so as we think about going into the fourth quarter with regards to the gross margin rate and then obviously, the embedded assumption around markdowns is given that we’re going into the fourth quarter and the holidays with a healthy inventory place, you would expect us to be favorable to last year, really driven by those improved year-over-year markdowns, just given the strength of our inventory.

So we’re pleased with our performance all year, the inventory productivity has been driving it. Probably always room to continue to improve, but I am really pleased where we’re starting at.

Brooke Roach: Great. Thank you so much.

James Duies: All right. 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.