Nordstrom reports mixed Q4 as sales at full-line stores take a hit
Nordstrom reported better-than-expected fourth profit but missed analysts’ sales estimates amid an “unexpected” slowdown in traffic at its full-priced stores during and after the holidays.
Fourth quarter net earnings totaled $248 million, or $1.48 a share, for the quarter ended Feb. 2, compared with $151 million, or 89 cents a share, during the year-ago period. The increase was primarily due to lower income tax expense associated with corporate tax reform. Earnings before interest and taxes fell to $333 million from $350 million last year.
Net revenues fell to $4.48 billion from $4.70 billion in the year-ago quarter, which had one more week. Total same-store sales inched up 0.1%. By division, same-store sales decreased 1.6% in full-price stores, primarily driven by softer traffic trends and increased 4% in the company’s off-price division, reflecting reflected continued momentum.
Gross profit as a percentage of net sales slipped 33 basis points to 35.1 percent amid higher markdowns in response to softer full-price sales trends and an elevated promotional environment.
On Nordstrom’s quarterly earnings call, co-president Erik Nordstrom said the company experienced “unexpected slowdown” in traffic at its full-priced stores around the holiday period, which caused weakness in softlines, particularly in women’s apparel.
“We are not satisfied with our results, Eric Nordstrom said during the call. “We missed our objective of increased profit growth and we are focused on getting back on track with profitability goals.”
Nordstrom was upbeat about fiscal 2019. It expects sales growth between 1% and 2% as well as earnings per share between $3.65 and $3.90, compared to the Street’s average estimate of $3.67 per share.
The company plans to open two full-price stores, including a women’s flagship in Manhattan, and five Nordstrom Rack stores in 2019.
Fourth quarter net earnings totaled $248 million, or $1.48 a share, for the quarter ended Feb. 2, compared with $151 million, or 89 cents a share, during the year-ago period. The increase was primarily due to lower income tax expense associated with corporate tax reform. Earnings before interest and taxes fell to $333 million from $350 million last year.
Net revenues fell to $4.48 billion from $4.70 billion in the year-ago quarter, which had one more week. Total same-store sales inched up 0.1%. By division, same-store sales decreased 1.6% in full-price stores, primarily driven by softer traffic trends and increased 4% in the company’s off-price division, reflecting reflected continued momentum.
Gross profit as a percentage of net sales slipped 33 basis points to 35.1 percent amid higher markdowns in response to softer full-price sales trends and an elevated promotional environment.
On Nordstrom’s quarterly earnings call, co-president Erik Nordstrom said the company experienced “unexpected slowdown” in traffic at its full-priced stores around the holiday period, which caused weakness in softlines, particularly in women’s apparel.
“We are not satisfied with our results, Eric Nordstrom said during the call. “We missed our objective of increased profit growth and we are focused on getting back on track with profitability goals.”
Nordstrom was upbeat about fiscal 2019. It expects sales growth between 1% and 2% as well as earnings per share between $3.65 and $3.90, compared to the Street’s average estimate of $3.67 per share.
The company plans to open two full-price stores, including a women’s flagship in Manhattan, and five Nordstrom Rack stores in 2019.