Upscale department store chain Nordstrom Inc (JWN.N) on Thursday reported a nearly 40% slump in quarterly sales, as lockdowns to contain the COVID-19 pandemic shut stores.
Measures to contain the coronavirus outbreak have weighed heavily on retailers, with J.C. Penney (JCP.N), J.Crew, Neiman Marcus and Stage Stores all having recently filed for bankruptcy.
Seattle-based Nordstrom said online sales rose 5% to $1.1 billion in its first quarter ended May 2. The retailer has strived to reduce inventory, cut costs and sharpen its marketing strategy.
“We successfully strengthened our financial flexibility by increasing liquidity, lowering inventory by more than 25 percent from last year and significantly reducing our cash burn by more than 40 percent from March into April,” Chief Executive Erik Nordstrom said in a statement. “We’re entering the second quarter in a position of strength.”
Nordstrom said roughly 40% of its stores have reopened, though they are in smaller markets. It plans to reopen its entire fleet of shops by the end of June, including in major markets California and New York.
Total net sales in the first quarter dropped to $2.03 billion from $3.35 billion a year earlier.
It reported a net loss of $521 million, or $3.33 per share, compared with a profit of $37 million, or 23 cents per share, a year earlier.
The company said store closures and restructuring led to a $173 million charge. Earlier this month, Nordstrom announced it would close 16 of its 116 full-line U.S. stores.
Earlier on Thursday, America’s top dollar store chains, Dollar General Corp (DG.N) and Dollar Tree Inc (DLTR.O), beat profit estimates and said they would benefit from demand for affordable groceries and household essentials in coming months as rising unemployment threatens to spur a deep recession.