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Nordstrom full-price stores hit with soft holiday traffic

Nordstrom’s full-price stores saw softer holiday traffic, causing the retailer to take a more promotional stance to get rid of excess inventory.

The retailer said that same-store sales rose 1.3% for the nine weeks ended Jan. 5. Full-price same-store sales inched up 0.3% compared to the third quarter year-to-date increase of 1.9%, reflecting softer traffic in stores.

Off-price same-store sales increased 3.9%, was consistent with year-to-date trends and expectations. Digital sales were up 18%, representing 36% of sales.

Nordstrom said that while year-to-date comparable sales of 2.1% were in-line with its prior outlook of approximately 2% for fiscal 2018, full-price sales were below the company’s expectations. As a result, the retailer has incorporated in its annual expectations higher markdowns taken during holiday and to reposition inventory to a more appropriate level by the end of the year. Earnings per diluted share is expected to be around the low end of the company’s prior outlook range of $3.27 to $3.37, including the third quarter estimated non-recurring credit-related charge of $0.28, or for comparability, $3.55 to $3.65, excluding the impact of the charge.

“The company remains committed to achieving its long-term financial targets, which supports three strategic objectives in driving higher shareholder returns: continuing market share gains, improving profitability and returns and maintaining disciplined capital allocation,” Nordstrom stated.

Nordstrom will report fourth-quarter and full-year earnings on Feb. 28.

Rose sales jumped 1.3% for the nine weeks ending Jan. 5, compared with the year-earlier period. Nordstrom said "full-price" comparable sales increased 0.3% relative to the third quarter year-to-date increase of 1.9% because of weaker in-store foot traffic. Online sales increased 18% during the same period, which now account for 36% of overall sales.
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