Nordstrom shares fell after the retailer said that slower sales impacted its performance in the holiday season.
The retailer said in a news release that sales fell 3.5% for the nine-week holiday period ending Dec. 31, 2022 compared to the prior year. Net sales at the Nordstrom banner were down 1.7% and net sales at Nordstrom Rack were down 7.6%.
A highly promotional environment and softer sales hurt Nordstrom’s performance during the crucial shopping period, CEO Erik Nordstrom said in a statement. He added that while higher-income shoppers appear resilient, “consumers are being more selective with their spending given the broader macro environment.”
The company said it implemented additional markdowns throughout the holiday period in order to clear through inventory excesses. Nordstrom expects inventory to be down as of the end of the year compared to the prior year.
Nordstrom also cut its full-year outlook and now expects revenues to grow at the low end of its previously issued guidance of between 5 and 7%. Earnings are expected to land between $1.33 and $1.53, down from its prior range of $2.13 to $2.43.
Nordstrom president and chief brand officer Pete Nordstrom said in a statement that the company being conservative with its buying and planning fast inventory turns, given the “continued uncertain environment.”
With this update, Nordstrom becomes the latest retailer to report a weak holiday sales period, as inflation puts pressure on consumers’ wallets. Earlier this month, Lululemon gave a disappointing update to its fourth quarter outlook and cut its fourth quarter guidance, citing headwinds from the macro-economic environment. Macy’s also warned last month that holiday sales would come in at the low end of its previously issued guidance, in part due to slower than expected sales during non-peak holiday weeks.
In Q3, Nordstrom reported total revenues of $3.5 billion in Q3, down 2.9% from the same time last year. Net loss was $20 million, or $0.13 loss per diluted share. Adjusted earnings per share were $0.20.
Nordstrom will report earnings for the fourth quarter and full-year 2022 on March 2, 2023.