Nordstrom Earnings Continue the Bloodletting in Retail

Nordstrom Inc. (NYSE: JWN) reported first quarter 2016 results after markets closed Thursday evening. The department store giant posted quarterly diluted earnings per share (EPS) of $0.26 on revenues of $3.2 billion. In the same period a year ago, Nordstrom reported EPS of $0.66 on revenues of $3.1 billion. First-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.46 and $3.28 billion in revenue.

Comparable store sales for the quarter fell 1.7%. Net sales rose 2.5% year-over-year.

The company repurchased 1 million shares of its own stock during the quarter for $50 million and said it has a total of $761 million left in its authorized share buyback program.

Nordstrom lowered its full-year same-store sales guidance from a prior range of flat to up 2% to a new range of negative 1% to plus 1%. Net sales, previously forecast to rise 3.5% to 5.5%, are now forecast to rise 2.5% to 4.5%. Diluted EPS guidance has fallen from a prior range of $3.10 to $3.35 to a new range of $2.50 to $2.70.

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The company also noted that its annual Anniversary sale is starting a week later this year. That will have a negative effect equal to 2 percentage points on second quarter same-store sales and a positive effect of 2.5 point on third quarter same-store sales.

Consensus estimates call for second-quarter EPS of $0.71 on revenues of $3.75 billion. For the full year analysts were looking for EPS of $3.20 on sales of $14.93 billion.

Co-president Blake Nordstrom said:

Our first quarter results were impacted by lower than expected sales. In response we have made further adjustments to our inventory and expense plans. As the pace of change in retail continues to accelerate, we remain committed to serving customers by taking steps that will continue to meet their expectations while driving profitable growth.

Shares traded down more than 12% in Thursday’s after-hours session, at $39.50, below the 52-week range of $43.84 to $80.23. The low was posted during Thursday’s regular trading session. Thomson Reuters had a consensus analyst price target of $51.96 before today’s results were announced. The high price target was $69.00.