Nordstrom Inc. has become the latest department store chain to post weaker-than-expected first-quarter earnings, recording double-digit percentage losses in its stock after Tuesday’s market close.
The Seattle-based retailer’s shares slumped more than 11% in after-hours trading on the news of adjusted earnings of 23 cents per share on revenues of $3.44 billion. (Wall Street had projected 43 cents a share on sales of $3.57 billion.) It also posted a comparable sales of 3.5% percent, which was worse than the 0.1% dip Wall Street anticipated. Nordstrom joins J. C. Penney Co. Inc. and Kohl’s Inc. in delivering disappointing results to kick off the fiscal year.
“While we expected softer trends from the fourth quarter to continue into the first quarter, we experienced a further deceleration. We had executional misses with our customers, and we’re committed to better serving them,” co-president Erik Nordstrom said in a statement. “This is well within our control to turn around.”
The firm attributed the declines in its full- and off-price categories to three areas: rebalancing its merchandise assortment, further investing in its digital marketing and issues with the rollout of its Nordy Club loyalty program.
Sales for its full-price division decreased 5.1% from the same period last year, while Nordstrom Rack revenues fell 0.6%. E-commerce, however, climbed 7%, with the department representing 31% of the company’s business.
“The strength of our inventory and expense execution helped mitigate a meaningful portion of our sales miss. We ended the quarter with inventories in solid shape, and our financial position remains strong,” Nordstrom said. “We’re actively taking steps to drive our top line, and we’re focused on delivering on our financial goals.”
The retailer also noted outsized growth in both digital and store traffic in its Los Angeles market. On Oct. 24, Nordstrom will officially debut its flagship store in New York City — its largest market in the country for online sales. (It opened a Manhattan men’s outpost last year.)
Cutting its full-year guidance, the company now expects earnings between $3.25 and $3.73 per share, down from a prior range of $3.65 to $3.90.
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