Nordstrom Inc. faced a notable setback in its extended trading performance on Thursday, with shares plummeting by 5.6% following the announcement of a wider-than-anticipated first-quarter loss, despite revenue surpassing analysts’ expectations.
The renowned department-store chain reported a net loss of $39 million, translating to a loss of 24 cents per share. Nordstrom’s pre-interest and taxes loss stood at $21 million. Despite the loss, the company’s sales surged to $3.335 billion from $3.181 billion in the corresponding period last year, exceeding analysts’ expectations of $3.19 billion in sales and a loss of 7 cents per share. Notably, total company net sales rose by 5.1% compared to the previous year’s quarter, with Nordstrom banner net sales seeing a 0.6% increase and net sales at Nordstrom Rack stores surging by 13.8% year over year.
In a statement, Nordstrom Chief Executive Erik Nordstrom expressed satisfaction with the top-line growth but acknowledged that profitability fell short of expectations. He emphasized the strong sales performance as providing momentum for the remainder of the year, reaffirming the company’s guidance for 2024.
During the conference call discussing the results, Erik Nordstrom noted that roughly half of the first-quarter profitability impact was related to timing issues. The company’s CFO, Cathy Smith, attributed the remainder of the profitability impact to factors such as higher-than-expected increases in inventory reserves and loyalty-related deferred revenue. Smith also highlighted operational challenges, including external theft in the transportation network, stating that swift action had been taken to address the issue.
Looking ahead, Nordstrom reiterated its earnings guidance for fiscal 2024, expecting earnings in the range of $1.65 to $2.05 per share, excluding the impact of share repurchase activity. The company anticipates comparable sales to range from a 1% decline to 2% growth. Analysts, however, expect full-year earnings of $1.81 per share and comparable sales growth of 0.7%, according to FactSet.
Nordstrom’s revenue forecast for fiscal 2024, which includes retail sales and credit-card revenue, predicts a decline of 2% to growth of 1% compared to the 53-week fiscal 2023.
Despite the setback in the first-quarter performance, Nordstrom’s shares have seen a 14% increase in 2024, outpacing the S&P 500 index’s gain of 9.8%. The company, which recently confirmed its exploration of going private, continues to navigate challenges while striving to maintain its market position and profitability in the evolving retail landscape. As consumer behavior and preferences evolve, Nordstrom remains committed to adapting its strategies to meet changing demands and sustain growth in a competitive market environment.