Nordstrom cuts inventory 26% in Q1 by cancelling orders, shipping from stores

Nordstrom decreased its inventory 26% in the first quarter of 2020 compared to the same period last year, according earnings results released Thursday. Sales decreased 40% in the quarter year over year, and the company posted a $521 million net loss. "With inventory as our biggest lever of flexibility, we reduced receipts by 30% during the first quarter, generated customer demand through increased marketing and promotions, and utilized our fulfillment capabilities to clear inventory held in our stores," CEO Erik Nordstrom said on a conference call with analysts Thursday. The retailer will reduce capital expenditures for the year by 30%, but supply chain investments remain a top priority, CFO Anne Bramman said. "This includes scaling our end-to-end platforms to support a single view of customers, inventory and product, and integrating physical and digital capabilities in off-price," said Nordstrom on the call. The company is in the process of merging its full-price and off-price teams in the name of labor efficiency — reducing corporate staff. The significant inventory reduction will give the retailer room to bring in new product as early as June while boosting liquidity, Nordstrom said. To reach a 26% year-over-year reduction, the company drastically reduced incoming product — 30% down for the quarter, but 80% down during April and May.