Analyst Note| David Swartz |
Narrow-moat Nordstrom experienced a 22% sales decline for 2020 holiday season as COVID-19 continued to impact its business. While a poor result on an absolute basis, this result suggests that the retailer is likely to report fourth-quarter sales close to our forecast of a 21.5% net sales drop. Nordstrom has many stores in urban areas and tourist cities that are suffering from restrictions and low customer traffic. Moreover, the firm closed 16 full-line stores in the past year, a full-line store base reduction of about 14%. More positively, e-commerce has picked up some of the slack of low store sales, having reached 55% of 2020 holiday sales (34% last year) on 23% growth, matching our fourth-quarter forecast.