Nordstrom Inc. has posted first-quarter results that missed Wall Street’s forecasts and showed a slide in profits.
The earnings dip, market watchers say, is due mostly to the Seattle-based company’s investments in accelerated store expansions, acquisitions — it purchased Trunk Club in Q3 of 2014 — and technology costs. During the conference call, management continued to assert that 2015 will be the “peak investment year” for the company.
Nordstrom’s profit decline, however, seems to be consistent with the experience of a slew of retailers, including Macy’s Inc., Kohl’s Corp. and J.C. Penney Co., which have all reported less-than-stellar earnings for the last quarter. Industry insiders have said there has been an overall lull in retail spending across the country.
Read on for the key numbers.
Net Income: Earnings for the first quarter, ended May 2, 2015, were $128 million, down 9 percent from last year’s Q1 earnings of $140 million.
EPS: Earnings per diluted share also fell, to 66 cents, compared with the year-ago quarter’s EPS of 72 cents.
Net Revenue: Net revenues were up year-over-year, to $3.1 billion, compared with net revenues of $2.8 billion in the year-ago quarter, a 10 percent jump.
Hit, Miss or Beat: The clothing, apparel and accessories retailer’s Q1 performance missed market watchers’ forecasts. Analysts polled by Yahoo Finance had predicted revenues of $3.2 billion and EPS of 71 cents per share.
Executive Insights: “We’ve made notable progress over the last year, achieving our strongest gains in new customer growth in recent history. We’ve also seen increased cross shopping across our businesses, reflecting our efforts to give customers more choices in how and where they would like to shop.”
“We’re pleased with our [first quarter] results, which were in line with our expectations. Our top line momentum continued with total sales growth of 10 percent … Results reflect a disciplined execution and planned growth initiatives.” –Blake Nordstrom, president, during May 14 conference call.
Looking Ahead: Based on its first-quarter performance, the company said it will reiterate its annual outlook for earnings per diluted share of $3.65 to $3.80, a net sales climb of 7 percent to 9 percent, and a comparable-sales increase of 2 to 4 percent.