Nordstrom is tanking after reporting a brutal quarter (JWN)

21.05.2019 23:44

nordstrom worker

Nordstrom shares plunged late Tuesday after the company reported dismal first-quarter earnings results.
Earnings per share, revenue, same-store sales, and guidance all fell short of expectations.
The more than 10% drop after the report sent shares to an eight-year low.
Watch Nordstrom trade live.

Nordstrom shares plunged 10% late Tuesday. to an eight-year low. after several key metrics. including comparable sales and full-year guidance, missed analysts' expectations.

"While we expected softer trends from the fourth quarter to continue into the first quarter, we experienced a further deceleration," Erik Nordstrom, Nordstrom's co-president, said in the release.

"We had executional misses with our customers, and we're committed to better serving them. This is well within our control to turn around."

Here's how the results compared to what Wall Street analysts polled by Bloomberg were expecting:

Revenue: $3.44 billion ($3.48 billion expected)
Adjusted earnings per share (EPS): $0.23 ($0.43 expected)
Comparable sales: -3.5% (-0.1% expected)

The retailer's outlook across several measures is grim relative to its prior expectations.

Nordstrom sees full-year 2019 net sales of unchanged to down 2%, below its previous estimate for a 1% to 2% increase. Meanwhile it sees its credit-card revenue growing in the low-to-mid single digits after previously expecting mid-to-high-single-digit growth.

Nordstrom said it plans to expand its presence in New York City, its largest market for online sales, and is "on track" to open its flagship store there on October 24.

The retailer bought back 4.1 million shares for $186 million during the quarter that ended May 4.

Ahead of the report, Credit Suisse analysts led by Michael Binetti warned Nordstrom could be in for a rough quarter, noting that the market didn't yet fully appreciate the "depth of the sales decline" in the company's core premium business.

"Overwhelmingly bearish sentiment currently leaves us Neutral," they said. "But our checks have been almost unanimously negative in 1Q."

They called Nordstrom's full-price store underperformance "alarming," and said they expected same-store sales, a common measure of retailers' health, to come in flat for the first quarter.

The broader analyst community was cautious on Nordstrom ahead of the report, with 16 of 24 analysts surveyed by Bloomberg saying "hold."

Nordstrom was down 19% this year through Tuesday's market close.

Nordstrom shares.