Digital sales increased 37% year over year to $1.6 billion, or 54% of the company’s total sales. At the company’s full-price stores, sales slipped 7%, while the Nordstrom Rack division notched a 32% decline.

Management said the off-price Rack segment continues to be the biggest source of new customers, and that it recently further integrated the unit’s inventory with its omnichannel platform, including expanding in-store pickup.

The results included Nordstrom’s Anniversary Sale, which is usually held in the summer but was delayed due to Covid-19. Excluding the benefit of the event, the company said that online sales increased by a percentage in the mid teens, roughly in line with the first half of the year. Full-price sales declined in the mid-20% range excluding the sale’s effects. Gross profits as a percentage of sales decreased by 1.5 percentage points, affected by the move in the Anniversary Sale’s timing and reduced sales volumes.

Nordstrom initially fell following the release, but was up 4.7% to $25.70 in late trading. More than 45% of the shares outstanding are shorted, so bears might be moving to cover their negative bets following the company’s unexpected profit.

Nordstrom stock has fallen roughly 40% in 2020, as the pandemic exacerbated issues such as declining mall traffic that have long plagued the department-store sector. However, the group has gotten a boost from vaccine hopes, and some analysts are growing more confident about the shares—even if they’re not willing to be bullish just yet.

The result was an encouraging change from the company’s disappointing second quarter, though some of the sales figures were lackluster compared to the prior period when excluding the Anniversary Sale’s impact.

Write to Teresa Rivas at teresa.rivas@barrons.com