Updated Nov. 21 6:14 p.m.

Despite declining sales volumes across all channels, Nordstrom Inc. went into the black for the third quarter ended Oct. 28, because of improved execution.

The Seattle-based retailer on Tuesday reported third-quarter net earnings of $67 million, or earnings per diluted share of 41 cents, in comparison with a net lack of $20 million, or 13 cents, within the year-ago period. Earnings before interest and taxes were $102 million, in comparison with $3 million within the year-ago period.

Net sales decreased 6.8 percent versus the identical period in fiscal 2022. Gross merchandise value decreased 7.1 percent. Third-quarter net sales include a 270 basis point negative impact from the wind-down of Canadian operations.

The timing of Nordstrom’s Anniversary Sale, with one week shifting from the second quarter to the third quarter, had a positive impact of roughly 200 basis points on net sales compared with 2022. Excluding the impacts of the Canadian wind-down, which occurred this 12 months, and Anniversary Sale timing shift, net sales would have been down roughly 6 percent. 

“Within the third quarter we continued to make progress against our priorities, and we’re especially pleased with the resulting improvements in gross margin and earnings,” Erik Nordstrom, chief executive officer of Nordstrom, said in an announcement. “Given continued uncertainty and softening consumer spend, we’re remaining agile and focused on serving our customers.”

In a conference call with investors, Nordstrom spelled out three fundamental priorities: improving Rack, increasing inventory productivity and further optimizing the provision chain.

“We defintiely see Rack as a growth vehicle,” said Nordstrom. The goal is to deliver a more robust assortment of “great brands at great prices.” To that end, the corporate has assigned “increasingly dedicated roles at Rack and has an improved buyng team,” Nordstrom said. “We latest see a whole lot of opportunity so as to add profitable latest Rack stores. We’re getting really great returns on those investments.”

On the Nordstrom malls, “We see opportunities with different inventory models to permit us to have a greater selection whether we own the merchandise or not,” said the CEO. “Step two is using data capabilities to curate the offer.” 

“Due to solid execution by our merchants, we’re heading into holiday in a favorable inventory position across each banners,” Pete Nordstrom, president and chief brand officer of Nordstrom, said in an announcement. “We’ve a powerful and relevant assortment of brands and products we all know our customers reply to, and we’re excited to assist them have a good time the moments that matter this holiday season.”

Throughout the conference call, Pete Nordstrom discussed at length the shop’s women’s business which has been difficult in certain respects for the corporate. It’s a giant and essential category for us and it’s got a whole lot of our attention,” said Pete. “We we’ve been making improvements, and we’re not where we have to be. But it surely’s definitely got momentum and moving in the suitable direction. We’ve spent a whole lot of time within the last couple of months in our own stores and really within the competition, too. What’s been good about this whole process is the actual return to the merchant stuff that’s super essential which is just being near what customers are asking for, what their selections are within the marketplace. We’ve got some some areas of strength. We’re going to speculate into our own label program. That it’s a chance for us to grow. Our sellthrough on our Nordstrom product group, our own label, is up 30 percent 12 months over 12 months, and a whole lot of that’s is in women’s apparel, [where] we’ve strong growth plans in 2024. And once we get that right, that’s going to have loads to do with the general health of our women’s apparel business.

Pete Nordstrom said within the stores he sees the demand for more things that feel “special, elevated and aspirational…And a whole lot of that leads to the advanced contemporary space. And so we’re doing a great job of editing down and prioritizing, specializing in brands. Within the last couple of years, we probably were a bit of too wide with the breadth of our selection, due to this fact, probably we weren’t making strong enough statements on the stuff that matter most.”

Pete Nordstrom said nearly all of the retailer’s categories improved from last quarter, “with lively, beauty and accessories leading.” Lively sales growth was led by footwear, he added, and sweetness was driven by designer brands and designer fragrance. Accessories, including handbags, jewelry and watches, were also strong.

Throughout the quarter, Nordstrom banner net sales decreased 9.4 percent and GMV decreased 9.8 percent. Net sales for Nordstrom Rack decreased 1.8 percent. Throughout the third quarter, lively grew by double digits, and sweetness and accessories were up by low-single digits, versus 2022.

Digital sales decreased 11.3 percent compared with the identical period in fiscal 2022.

Gross profit as a percentage of net sales of 35 percent increased 180 basis points compared with the identical period in fiscal 2022, primarily attributable to lower markdowns, increased inventory productivity and lower buying and occupancy costs, partially offset by deleverage on lower sales.

In forecasting for the 12 months, the corporate maintained its previous forecast of a revenue decline, including retail sales and bank card revenues, of 4 to six percent versus fiscal 2022, including an roughly 250 basis point negative impact from the wind-down of Canadian operations and an roughly 130 basis point positive impact from the 53rd week.

Nonetheless, the corporate did raise its forecast for EBIT margin to 1.8 to 2.1 percent of sales versus the previous forecast of 1.5 to 2 percent of sales.

The forecast for adjusted EBIT margin (excluding charges related to the wind-down of Canadian operations) was also modified to three.8 to 4.1 percent of sales versus the three.7 to 4.2 percent previously forecast.