Nordstrom’s new store at the Yorkdale Shopping Center, Toronto | Source: Courtesy
SEATTLE. United States — Nordstrom Inc. isn’t escaping retail’s steady decline, following peers in posting weak sales.
The Seattle-based company’s first-quarter earnings missed Wall Street estimates as comparable-store sales declined 0.8 percent. Analysts had forecast a break-even quarter. That sent shares plunging as much as 7 percent in late trading.
The results may deepen investors’ pessimism regarding retail and specifically department stores, since it follows drops in comparable sales from Macy’s Inc. and Kohl’s Corp. that also exceeded forecasts.
Nordstrom, the largest upscale department-store chain in the US, is suffering from sluggish store traffic and consumers’ growing preference to buy online. The company is betting it can buck the trend and entice younger shoppers by expanding its assortment of exclusive brands, like J. Crew, Madewell and Topshop.
Comparable sales at Nordstrom’s full-price stores and website slipped 2.3 percent in the quarter, a steeper decline than the 1 percent dip analysts expected. Even the retailer’s discount-focused chain struggled. Same-store sales at the company’s Nordstrom Rack business fell 0.9 percent. Analysts had expected sales by that measure to be flat compared with last year.
The company reiterated its forecast of $2.75 to $3 a share and flat comparable sales for 2017.
The after-hours decline sent shares as low as $42.95, extending an earlier drop of 7.6 percent during regular trading. Through Thursday’s close, they have fallen 3.6 percent this year, compared with a 7-percent gain for the S&P 500 index.
Nordstrom also discussed Bonobos, an online retail partner that faces a change in ownership. Wal-Mart Stores Inc. is in talks to acquire Bonobos for about $300 million, according to a person familiar with the situation.
Nordstrom doesn’t currently foresee any changes in its relationship with the startup, po-president Erik Nordstrom said on a conference call. The department store also has a good relationships with Jet.com, another e-commerce retailer owned by Wal-Mart, he said.
By Lindsey Rupp; editors: Nick Turner and Jonathan Roeder.