Nordstrom Earnings Fall Sharply
Retailer cuts guidance for the year, sending shares to new lows
Nordstrom shares fell nearly 21% to $50.25 in after-hours trading, below the 52-week low of $61.06 set Wednesday.
The company said sales began to slow in August and remained below its expectations for its fiscal third quarter. The slowdown was across all categories, regions and channels, including online, at both its full-priced Nordstrom department stores and its off-priced Rack locations. The retailer doesn’t expect an improvement in the fourth quarter.
Nordstrom executives didn’t have a ready explanation for the falloff beyond saying there were fewer people buying clothes in the period than they had expected. The retailer moved quickly to mark down goods that weren’t selling, and as a result it didn’t end the period with excess merchandise similar to some of its peers.
“It’s just a traffic thing,” said Jamie Nordstrom, president of stores. “We’ve got less people buying clothes this quarter than we expected. And there’s really nothing else to point to.”
At Nordstrom, sales increased 6.6% to $3.2 billion for the three months that ended Oct. 31. Excluding newly opened or closed locations, sales increased 0.9%. Profit fell to $81 million, compared with $142 million a year earlier. Earnings were hurt by the previously announced sale of Nordstrom’s credit-card business to Toronto-Dominion Bank. TD -1.48 %
Nordstrom now forecasts a full-year profit of $3.40 to $3.50 a share, less than its previous guidance of a $3.70 to $3.80 per-share increase. Sales growth is now forecast between 7.5% to 8%, down from the previous range of 8.5% to 9.5%. Excluding newly opened or closed locations, sales are projected to increase 2.5% to 3%, compared with its previous view of 3.5% to 4.5%.