Scott Olson | News Getty Images | Getty Images Nordstrom on Tuesday cut its full-year financial forecast as the department store chain grapples with excess inventory and slowing demand. The retailer’s lowered forecast came even as it reported earnings and sales for the second quarter of the fiscal year above analysts’ estimates. Its shares fell 13% in extended trading. Earlier in the day, Macy’s also cut its full-year outlook, saying it expects worsening consumer spending on discretionary goods like apparel to force it to use heavy markups to move items off shelves. “Customer traffic and demand has slowed significantly since late June, particularly at Nordstrom Rack,” Nordstrom CEO Erik Nordstrom said in a news release. “We are adjusting our plans and taking action to navigate these dynamics in the near term, including aligning inventory and expenses with recent trends.” Nordstrom now sees annual sales, including credit card revenue, up 5% to 7%, compared with a previous range that called for 6% to 8% growth. It calls for adjusted earnings per share to range from $2.30 to $2.60, down from a previous forecast of $3.20 to $3.50. Here’s how Nordstrom fared in its fiscal second quarter compared to what analysts expected, based on Refinitiv estimates:
Earnings per share: 81 cents adjusted vs. 80 cents expected Revenue: $4.1 billion vs. $3.97 billion expected
Nordstrom’s net income in the quarter ended July 30 rose to $126 million, or 77 cents a share, from $80 million, or 49 cents a share, a year earlier. Sales rose to $4.10 billion from $3.66 billion. Against this background, digital sales increased by 6.3%, making up 38% of total revenue. Nordstrom said its menswear division had the biggest growth compared to 2021, with footwear, womenswear and beauty bookings posting double-digit gains as shoppers looked for special-occasion clothing. Net sales for the Nordstrom banner rose 14.7%, boosted in part by the timing of the company’s annual anniversary sale. At Nordstrom Rack, the company’s off-price banner, net sales rose 6.3 percent from a year earlier, but were down from pre-pandemic levels. Inventory levels across the company were up nearly 10% compared to the year-ago period.
