Nordstrom’s 4Q profit drops on holiday discounts
Nordstrom’s fourth-quarter profit fell nearly 6 percent while revenue rose less than 1 percent.
The Associated Press
Nordstrom’s markdowns during the holiday shopping season and costs to grow its Nordstrom Rack chain weighed on its profit during its holiday quarter.
The high-end retailer’s earnings outlook for this year was also short of Wall Street predictions.
The Seattle-based chain said that expenses from its plans to open stores in Canada, expand its Nordstrom Rack chain and its technology investments would hamper profit growth.
For the three months through Feb. 1, net income slipped nearly 6 percent, to $268 million, or $1.37 a share, from $284 million, or $1.40 a share, in its fiscal fourth quarter the year before. Its revenue rose less than 1 percent, to $3.71 billion.
Nordstrom’s profit exceeded market forecasts of $1.34 a share, but revenue fell short of the $3.73 billion that analysts polled by FactSet anticipated.
Slow spending over the holidays has hurt many retailers.
Nordstrom was the latest to say that it increased markdowns because of the promotions this November and December.
Nordstrom’s revenue from its websites, catalogs and stores open at least a year increased 2.2 percent, versus a gain of 6.1 percent in the previous year.
That’s a key retail measure as it strips away the impact from new and closed stores, which can skew trends. The metric rose 3.6 percent at Nordstrom Rack.
For this year, Nordstrom forecast a profit of $3.75 to $3.90 a share; analysts were anticipating $4.07 a share.
It anticipates that revenue will increase 5.5 to 7.5 percent, suggesting sales of $13.2 billion to $13.5 billion. Analysts predicted $13.5 billion.
For the current quarter, the retailer expects profit of 60 to 70 cents a share, below analysts’ estimate of 78 cents a share.
Nordstrom shares closed Thursday at $59.44, up 56 cents, or 1 percent.
After the financial results were released, the stock fell 49 cents to $58.95 in after-hours trading. The stock has gained 7.8 percent over the past 12 months.