Nordstrom on Tuesday reported fourth-quarter sales and earnings that topped analysts’ estimates, thanks to stronger shopper demand online and growth at its off-price Nordstrom Rack business.

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But the company cautioned that it has been recently impacted by shipping delays, which held up some of its holiday merchandise from getting to shelves and stockrooms on time. Nordstrom said it is working to sell through that inventory, most of which is nonseasonal, during its fiscal first quarter. It said it should be back to normal inventory levels by the second quarter.

“Heading into 2021, we’re taking steps to improve our inventory position,” CEO Erik Nordstrom said in a statement.

The retailer’s shares were falling around 3% in after-hours trading.

Here’s how Nordstrom did for the quarter ended Jan. 30 compared with what analysts were anticipating, using Refinitiv data:

• Earnings per share: 21 cents vs. 14 cents expected
• Revenue: $3.65 billion vs. $3.60 billion expected

Nordstrom’s net income shrank to $33 million, or 21 cents per share, from $193 million, or $1.23 a share, a year earlier. That came in better than the 14 cents per share that analysts were anticipating, according to a Refinitiv survey.

Total revenue fell nearly 20% to $3.65 billion from $4.54 billion a year earlier. That came in ahead of a forecast for $3.60 billion.

Nordstrom said its digital sales swelled 24% from a year earlier and represented 54% of its total business during the fourth quarter.

While the department store operator says the timing of customer demand recovering from pandemic lows remains uncertain, it is still calling for fiscal 2021 sales to grow more than 25%. Analysts had been calling for year-over-year revenue growth of 26%.

E-commerce, meantime, is expected to represent about 50% of sales this year. Nordstrom recently outlined this forecast at a virtual investor day, where it said it also plans to invest more in growing the Nordstrom Rack business online. This outlook assumes that Nordstrom’s stores remain open during the year, the company said.

Nordstrom isn’t the only retailer that faces shipping headwinds. Backlogged ports in the U.S. and heightened shipping costs continue to hit businesses that sell everything from apparel and shoes, to appliances, to at-home fitness equipment.

As shoppers do return to stores, the persisting problem could make it even more difficult for retailers to plan their inventories and keep shelves chock-full of goods.

Nordstrom shares are up about 8% over the past 12 months, as of Tuesday’s market close. The retailer has a market cap of $5.93 billion, which is less than Kohl’s but greater than Macy’s.

Find the full press release from Nordstrom here.