Nordstrom's Q1 sales and profit down, cuts forecast

Nordstrom, Inc. reported earnings per diluted share for the first quarter ended May 4, 2019 of 23 cents compared to 51 cents last year, while the company said, total net sales decreased 3.5 percent to 3,349 million dollars. Nordstrom said, top-line results were impacted by — loyalty, digital marketing and merchandise — which contributed to declines across its full-price and off-price businesses, in both stores and online.

“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. This is well within our control to turn around,” said Erik Nordstrom, Co-President, Nordstrom, Inc. in a statement.

Highlights of Nordstrom’s first quarter results

First quarter net earnings were 37 million dollars compared with 87 million dollars during the same period in fiscal 2018, while EBIT were 77 million dollars or 2.3 percent of net sales, compared with 153 million dollars or 4.4 percent of net sales, during the same period in fiscal 2018 driven by lower sales volume. Gross profit, as a percentage of net sales, of 33.5 percent decreased 60 basis points.

In full-price, net sales decreased 5.1 percent and off-price net sales decreased 0.6 percent. Total company digital sales grew 7 percent and represented 31 percent of the business.

To date in fiscal 2019, the company opened three stores, closed two stores and relocated one store. Nordstrom plans to expand its presence in New York City, its largest market for online sales and the company is on track to open its flagship on October 24 and two Nordstrom Local neighborhood hubs this fall.

The company’s revised annual outlook includes net sales growth to range between decrease of 2 percent to flat compared to previous outlook of increase between 1 to 2 percent, EBIT to range between 805 to 890 million dollars compared to 915 to 970 million dollars previously, EBIT margin between 5.3 percent to 5.8 percent against 5.9 to 6.1 percent previously and earnings per diluted share in the range of 3.25 to 3.65 dollars compared to earlier outlook of between 3.65 to 3.90 dollars.

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