Things are not looking up for department stores.
Nordstrom Inc. on Thursday added its name to the list of department store chains posting earnings that were below market watchers’ expectations.
The Seattle-based company said its net income for the first quarter of 2016, which ended April 30, slid 64 percent, to $46 million, or 26 cents per diluted share, from $128 million, or 66 cents per diluted share in the prior year. It was a substantial miss on analysts’ predictions for diluted earnings per share of 46 cents.
Revenues advanced 3 percent, to $3.2 billion, from $3.1 billion in the comparable period, but missed estimates for revenues of $3.3 billion. The firm said its comparable sales decreased 1.7 percent.
Consistent with overall industry trends, the company saw solid gains in its discount channel. Off-price net sales, which consist of Nordstrom Rack stores and Nordstromrack.com/HauteLook, increased 11.8 percent. Comparable sales in the division increased 4.6 percent.
“Our first-quarter results were impacted by lower than expected sales. In response we have made further adjustments to our inventory and expense plans,” said Blake Nordstrom, co-president of Nordstrom, in a statement. “As the pace of change in retail continues to accelerate, we remain committed to serving customers by taking steps that will continue to meet their expectations while driving profitable growth.”
The company has downward adjusted its forecast for FY16. Nordstrom now expects net sales to increase by 2.5 to 4.5 percent, compared with prior expectations for an increase of 3.5 to 5.5 percent. Comp sales are now forecast to range from a 1 percent decrease to a 1 percent increase, compared with the prior outlook predicting a zero to 2 percent rise. Diluted EPS is predicted to be in the range of $2.50 to $2.70, compared with prior predictions in the range of $3.10 to $3.35.
The company said that beauty was its top-performing category across U.S. full-line stores and Nordstrom.com.
At press time (4:35 p.m. EDT), the firm’s stock had slipped more than 17 percent in after market trading.