Shares of Nordstrom (JWN) are down 9% after the American department store chain issued a weak outlook for the year ahead.
The Seattle-based company reported earnings per share (EPS) of $0.96 U.S. versus $0.88 U.S. that was expected among analysts who cover the company.
Revenue in the fourth and final quarter of 2023 came in at $4.42 billion U.S. compared to $4.39 billion U.S. that was forecast on Wall Street.
While Nordstrom managed to beat estimates on the top and bottom lines with its Q4 2023 results, the company gave tepid forward guidance, sending its share price lower.
Specifically, the company said it expects full-year revenue, including retail sales and credit cards, will range from a 2% decline to a 1% gain compared with the previous year.
Nordstrom added that it expects earnings of $1.65 U.S. to $2.05 U.S. for all of this year. The guidance fell short of analysts' expectations.
Management said it continues to see soft demand as consumers become choosier and more price-conscious in the wake of high inflation and high interest rates.
The company is also seeing lagging sales at its off-price retailer, Nordstrom Rack, and struggling with bloated inventory levels, leading to markdowns.
Nordstrom also singled out the closure of its Canadian operations as a drag on its earnings and outlook. The company said exiting the Canadian market last year caused its net sales to drop more than 3%.
Nordstrom opened 19 new Nordstrom Rack stores last year, bringing the total to 258 stores. Including its 93 flagship Nordstrom locations, the company ended 2023 with 359 total outlets.
The retailer said it plans to open 22 new Nordstrom Rack stores in 2024.
Nordstrom also reported that its online sales dropped 1.7% in the fourth quarter of last year and its inventory declined 2.7% compared with a year earlier.
Prior to today (March 6), Nordstrom’s stock had increased 7% in the past 12 months to trade at $20.90 U.S. per share.
