Nordstrom Shares Soar After It Lifts Forecast. Shoppers Are Buying Dress Clothes Again.

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Nordstrom

shares soared after the retailer lifted its guidance for the second time this year.

Nordstrom’s improving situation is a sign that its upscale shoppers are less affected by inflation than those frequenting more mainstream retailers like

Target

or

Walmart
.

Overall, the retailer posted mixed results in its fiscal first quarter. Nordstrom (JWN) said it lost an adjusted six cents a share, on total revenue of $3.57 billion. Analysts were looking for the company to lose a nickel a share on revenue of $3.29 billion.

For the full year, Nordstrom now expects total revenue growth—including retail sales and credit card revenue—of 6% to 8% from year-ago levels, up from a previous range of 5% to 7% growth. It sees adjusted EPS of $3.20 to $3.50, up from a prior forecast of $3.15 to $3.50 and comfortably above the $3.11 consensus estimate.

Nordstrom jumped 11.2% to $23 in late trading following the news.

Both full-line and its off-price Nordstrom Rack sales increased double digits from year-ago periods in the quarter, at 23.5% and 10.3%, respectively. Nordstrom said that the return of in-person social events and travel bolstered sales, with men’s apparel notching significant double-digit year-over-year sales growth, above prepandemic levels. The retailer also highlighted strong double-digit sales growth in other core categories like women’s apparel, shoes, and designer goods.  

The company saw its target higher-income shopper returning to cities as well, as sales at its urban stores surpassed prepandemic levels; the flagship Manhattan location was its top-performing Nordstrom store in the quarter. Moreover, Nordstrom noted that its merchandise margins “improved as a result of favorable pricing impacts and lower markdown rates.”

Concurrently, the firm announced a $500 million share repurchase plan.

The company’s upbeat tone is in contrast to other retailers this quarter, as Walmart (WMT) and Target (

TGT

) lowered their outlooks, and apparel sellers have struggled with shifting consumer spending. Yet Nordstrom’s results point to the continuing bifurcation of the consumer, as higher-earning shoppers have been more easily dealing with inflation and continuing to spend on categories they didn’t buy during the pandemic.

Write to Teresa Rivas at [email protected]