Nordstrom Cuts Full-Year Forecast on Sales Slide; Shares Tumble

(Bloomberg) -- Nordstrom Inc. posted a first-quarter sales decline and cut its full-year forecast, adding to a dreary outlook for department stores after dismal results earlier in the day from J.C. Penney Co. and Kohl’s Corp.

• First-quarter revenue fell to $3.44 billion, compared with projections for $3.48 billion.

Key Insights

• Nordstrom cited “executional misses” in the period that ended May 4, and cut its net sales forecast for the year to between down 2% and flat, from the 1% to 2% increase it had been expecting. It cited issues with its loyalty program, digital marketing and merchandise.
• The company is hoping to turn things around soon, especially since it just made a huge investment on brick and mortar. The Seattle-based retailer will open its flagship store in New York this fall at the base of a skyscraper that’s altered the city’s skyline. The flagship will compete head-on against its luxury rivals.
• Concerns about a trade war between the U.S. and China continue to loom over department-store chains. J.C. Penney said Tuesday that its private label business will face a “meaningful impact” from the latest proposed tariff list, which includes apparel. Nordstrom didn’t mention tariffs in the release, so investors will be listening for more on a conference call later Tuesday.

Market Reaction

• The shares fell as much as 11% in after-hours trading. They have slumped 19% this year through Tuesday’s close, while the benchmark S&P 500 Index has climbed 14%.

Get More

For more on the results, click here.
For the company statement, click here.

To contact the reporter on this story: Kim Bhasin in New York at kbhasin4@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson

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