Nordstrom cuts annual sales forecast as stock tumbles
Upscale department store chain Nordstrom reported fiscal first-quarter profit Tuesday that missed Wall Street analysts’ expectations.
“While we expected softer trends from the fourth quarter to continue into the first quarter, we experienced a further deceleration,” Erik Nordstrom, Nordstrom Inc. co-president, said in a statement.
Nordstrom reported net income of $37 million, or 23 cents a share. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 43 cents per share. Shares of the company dropped more than 9 percent in post-market trading.
The Seattle-based company, which sells men’s and women’s apparel, shoes, accessories and houseware saw both full-priced items and off-price products fall in stores and online, Reuters reported. The fall was partly due to the rollout of its rewards club “Nordy Club” that didn’t resonate with its customers.
Nordstrom’s online sales increased 7 percent and accounted for 31 percent of Nordstrom’s total sales.
The department store chain said it expects total net sales for the current year to be anywhere from a 2 percent decrease to unchanged. That compares with the original forecast of a 1 percent to 2 increase.
Nordstrom’s shares tumbled more than 9 percent to $34.40 in after-market trading after the release of the earnings report.
Meanwhile, Nordstrom’s is gearing up to open its flagship store in New York City in October, according to Bloomberg.
The Associated Press contributed to this report.