Both retailers struggled with excess inventory and large discounts as customers were reluctant to spend online.

Macy’s Inc. and Nordstrom Inc. both reported declines in online sales in 2022. Both retailers struggled with using promotions and discount pricing to offload excess inventory.

Macy’s said digital sales were down 9% for the fourth quarter ended Jan. 28, 2022, though they were 24% higher than the comparable period in 2019. Brick-and-mortar store sales fared better, decreasing just 2% year over year. Macy’s is No. 16 in the 2022 Digital Commerce 360 Top 1000.

Nordstrom’s ecommerce business felt similar pressures over the period. Digital sales for the fourth quarter ended Jan. 28 were down 13% year over year, and made up 40% of total sales for the quarter. Nordstrom is No. 20 in the 2022 Digital Commerce 360 Top 1000.

Macy’s said promotions hurt margins

Macy’s gross margin in the fourth quarter was 34.1%, down from 36.5% a year earlier. The company attributed the decline to markdowns and promotions that were larger than in 2021, a reflection of “the company’s commitment to end 2022 with inventories at the right level and composition.”

“We were competitive but measured in our promotions, took strategic markdowns and intentionally did not chase unprofitable sales,” CEO Jeff Gennette said in the statement. The retailer is focused on areas of growth that include private brands, off-mall expansion and luxury goods, he added.


Total same-store sales, a key performance metric for retailers, fell 2.7% in the fourth quarter. That figure was supported primarily by strong growth at Bloomingdale’s and Bluemercury, the New York-based company’s higher-end brands. At Macy’s namesake brand, meanwhile, they fell 3.3%.

“We believe discretionary spend will be under pressure across income tiers and spending will move toward services and essential goods,” Gennette said on a call with analysts, noting that he expects demand for gift-giving and occasion-based products to remain strong.

Nordstrom Rack couldn’t find customers

Like Macy’s, Nordstrom struggled with selling discounted merchandise.

While discount rivals such as TJX Companies Inc.’s T.J. Maxx and Ross Stores Inc. (No. 70 in the 2022 Digital Commerce 360 Top 1000) have attracted more shoppers as inflation bites, Nordstrom’s off-price Rack business has floundered. Sales remain below pre-pandemic levels, a sign that Rack’s market share has been shrinking.


Sales at Rack fell 8.1% in the quarter versus a 2.4% drop at the Nordstrom-banner stores. Still, executives told analysts on an earnings call that they plan to open 20 Rack stores starting in the spring because off-price consumers tend to prefer in-store shopping. Rack locations are less expensive to build than a full-fledged department store, executives added. 

Sales at U.S. department stores have been uneven in recent months, signaling a pullback by some shoppers amid stubbornly high inflation. Companies’ decisions to build up merchandise during the pandemic consumption boom have now left some store operators stuck with too much inventory, leading to profit-busting markdowns.

Nordstrom says a reduction of merchandise and the winding down of its Canada operations will improve performance in 2023.

Macy’s earnings summary

For the quarter ended Jan. 28, Macy’s reported:

  • Net sales were down 4.6% year over year to $8.3 billion.
  • Digital sales were down 9% over 2021, and sales in stores were down 2%.
  • Net income was $508 million, down from $742 million in 2021.

For the year ended Jan. 28, Macy’s reported:

  • Net sales were $24.4 billion, down 0.1% over 2021.
  • Digital sales decreased 6% over 2021, while sales in stores grew by 3%.
  • There were 42.7 million active customers, a 4% decrease.
  • Net income was $1.1 billion, down from $1.4 billion in 2021.

Nordstrom earnings summary

For the quarter ended Jan. 28, Nordstrom reported:

  • Revenue was $4.3 billion, up 5% year over year.
  • Net sales were down 4.1% to $4.2 billion. 
  • Digital sales made up 40% of total sales, and were down 13.1%.

For the year ended Jan. 28, Nordstrom reported:

  • Net sales were $15.1 billion, up from $14.4 billion in 2021.
  • Revenue was $15.5 billion, up from $14.8 billion the previous year.
  • Digital sales made up 38% of total sales, down from 42% in 2021. 
  • Nordstrom opened three stores in 2022.

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