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Nordstrom shares fall 10% as retailer warns of potential sales declines in 2024

·2 mins

Nordstrom Beats Holiday Sales Expectations but Forecasts Decline in Revenue

Nordstrom reported better-than-expected sales for the holiday quarter, surpassing Wall Street’s estimates. However, the company expects a decline in revenue for the upcoming fiscal year, citing a shorter sales week. Despite this, Nordstrom plans to open more Nordstrom Rack stores and increase online sales. The company predicts a range of a 2% decline to a 1% gain in full-year revenue compared to the previous year. Nordstrom also expects higher earnings per share for the full year. Following the announcement, shares of Nordstrom fell approximately 10% in extended trading.

Here’s how Nordstrom’s reported performance compared to the expectations:

  • Adjusted earnings per share: 96 cents vs. 88 cents expected.
  • Revenue: $4.42 billion vs. $4.39 billion expected.

Nordstrom, like other retailers, has faced challenges due to more price-conscious consumers, inflation, and higher interest rates. The company also had specific issues, including lagging sales at Nordstrom Rack and excess inventory, resulting in increased markdowns. In the fiscal quarter ending Feb 3, Nordstrom’s quarterly revenue rose about 2% from the previous year. Net income also increased. Nordstrom Rack performed well during the holiday quarter, with net sales rising 14.6%. Women’s apparel, beauty, and the active category showed the strongest growth.

Online sales dropped in the fourth quarter compared to the previous year, representing 38% of total sales. Nordstrom’s stock closed at $20.90, with a market value of approximately $3.4 billion.