Looking back on the fiscal year, revenue increased 38% versus 2020 and we delivered an EBIT margin of 3.4%, in line with our guidance.
As we raised inventory levels and improved average price points in our stores, we posted a sequential sales improvement of 320 basis points in the fourth quarter.
In Q4, we improved our in-stock position at the Rack by increasing the flow of inventory, making more frequent deliveries to our stores, partnering with brands to prioritize Rack deliveries and focusing our sourcing efforts on core categories that matter most to customers such as shoes and apparel.
In addition to sequential improvement in our Rack banner, we saw strong enterprise digital growth of 23% versus 2019 and increased utilization of the interconnected capabilities delivered by our market strategy.
Nordstrom banner sales were flat, while gross merchandise value, or GMV, increased 2% in the fourth quarter versus 2019.
The Southern U.S., where 44% of our stores were located, was a source of strength for the Nordstrom banner, outperforming the Northern U.S. by approximately 7 percentage points.
Notably, suburban locations outperformed our urban locations by 10 percentage points in the fourth quarter as city centers have been disproportionately impacted by the effects of the pandemic.
We continue to scale the enhanced options we launched in 2020, like the expansion of order pickup and ship to store to all Nordstrom Rack locations with order pickup reaching a record high 11% of Nordstrom.com sales this quarter.
For example, the average customer that shops across both banners, in-store and online spends over 12 times more than a customer utilizing a single channel and banner.
Our Nordy Club loyalty program is a powerful engagement driver with 67% sales penetration in 2021.
This year, remote selling sales volume increased 63% versus last year.
With regard to increasing our digital velocity, we maintained strong growth at Nordstrom.com and NordstromRack.com this quarter with digital sales increasing 23% over the fourth quarter of 2019.
With continued growth in digital, our total penetration has increased by 9 percentage points over the past two years to 44%.
In the fourth quarter, we also saw a record high mobile app usage with mobile users representing approximately 70% of total digital traffic.
And pandemic-related categories continued to outperform, particularly home and active with sales up 52 and 22%, respectively, compared to 2019 levels.
Our core categories in apparel and shoes, which collectively make up more than 70% of our business, are not quite back to 2019 levels but they are recovering.
We're very encouraged by the results with merchandise margins up 235 basis points over 2019, and we see more opportunity to drive additional margin improvements in '22.
As a result, our ending inventory was higher than planned but we expect to cut our sales to inventory spread in half by the end of the first quarter.
Our alternative partnership models have gained approximately 300 basis points as a percent of Nordstrom banner GMV since 2019, reaching 10% today.
We launched over 300 new brands in partnerships this year, including Open Edit, Farm Rio, Fanatics, and ASOS DESIGN.
After growing choice count by 50% this year, we entered 2022 with record-high selection.
Overall, net sales increased 23% in the fourth quarter compared to the same period in fiscal 2020, and decreased 1% compared to the same period in fiscal 2019.
Total revenue finished the year up 38%, in line with our guidance.
In the fourth quarter, Nordstrom banner sales were flat while GMV increased 2%.
Nordstrom Rack sales declined 5% in the fourth quarter, a sequential improvement of 320 basis points over the third quarter as we raised inventory levels and improved average price points in our stores.
Our digital business continues to grow with fourth quarter sales increasing 23%.
Gross profit as a percentage of net sales increased 340 basis points primarily due to increased promotional effectiveness, fewer markdowns, and leverage in buying and occupancy costs.
Ending inventory increased 19%, with approximately half of the inventory increase due to planned investments to ensure in-stock merchandise availability.
Total SG&A as a percentage of net sales increased 340 basis points in the fourth quarter as a result of continued macro-related fulfillment and labor cost pressures.
These increased expenses were partially offset by continued benefits from resetting the cost structure in 2020 and a $32 million noncash asset impairment charge in 2019.
EBIT margin was 6.8% of sales for the fourth quarter, an improvement of 10 basis points.
For the year, EBIT margin was 3.4%, toward the high end of our guidance.
We continue to strengthen our financial position, ending the year with $1.1 billion in liquidity, including $800 million fully available on our revolver a leverage ratio of 3.2 times.
For the fiscal year 2022, we expect revenue growth of 5% to 7%.
We expect EBIT margin of approximately 5.6 to 6% for the full year.
Our effective tax rate is expected to be approximately 27% for the fiscal year.
Given solid top line growth, coupled with progress on our productivity initiatives, we expect diluted earnings per share of $3.15 to $3.50 for the year, which excludes the impact of share repurchases, if any.
We're planning capital expenditures at normalized levels of 3% to 4% primarily to support supply chain and technology capabilities.
We are committed to an investment-grade credit rating and remain on track to decrease our leverage ratio to approximately 2.5 times by the end of 2022.
Subject to completion of our year-end audit and the related certification process with our bank group, we expect to be in a position to resume returning cash to shareholders in the first quarter.
Choice count is now at an all-time high with more than 300 new brands launched last year in growth and alternative partnership model, all of which position us to grow sales by delivering newness, selection and inspiration to our customers.

Summary:
In Q4, we improved our in-stock position at the Rack by increasing the flow of inventory, making more frequent deliveries to our stores, partnering with brands to prioritize Rack deliveries and focusing our sourcing efforts on core categories that matter most to customers such as shoes and apparel.
With regard to increasing our digital velocity, we maintained strong growth at Nordstrom.com and NordstromRack.com this quarter with digital sales increasing 23% over the fourth quarter of 2019.
As a result, our ending inventory was higher than planned but we expect to cut our sales to inventory spread in half by the end of the first quarter.
For the fiscal year 2022, we expect revenue growth of 5% to 7%.
We expect EBIT margin of approximately 5.6 to 6% for the full year.
Given solid top line growth, coupled with progress on our productivity initiatives, we expect diluted earnings per share of $3.15 to $3.50 for the year, which excludes the impact of share repurchases, if any.
Subject to completion of our year-end audit and the related certification process with our bank group, we expect to be in a position to resume returning cash to shareholders in the first quarter.