Nordstrom shares slide after revenue disappoints By Investing.com
© Reuters Nordstrom (JWN) shares slide after revenue disappoints
Nordstrom (NYSE:) shares are down premarket Friday after missing second quarter sales expectations.
for the quarter came in at $3.62 billion, below the consensus estimate of $3.68B. In addition, net sales decreased 8.3% versus the same period in fiscal 2022. However, the company reported earnings of $0.81 per share, $0.36 better than the analyst estimate of $0.45.
JWN shares are down around 1% premarket, adding to its more than % decline on Thursday.
“We’ve worked hard to improve our operating model, and our solid results reflect the continued progress we made against our top priorities to improve Nordstrom Rack performance, increase inventory productivity and deliver efficiencies through supply chain optimization,” said Erik Nordstrom, chief executive officer of Nordstrom.
The company reaffirmed its fiscal 2023 revenue and adjusted earnings outlook. It sees its FY2024 EPS between $1.80 and $2.20, versus the consensus of $1.99.
Reacting to the results, William Blair analyst Dylan Carden said the quarter shows encouraging progress for the company with rack and efficiency initiatives.
“The year-over-year sales decline of 8.3% was driven by a 10.1% decline in sales at the Nordstrom banner, which includes a negative impact from the wind-down of Canadian operations (400 basis points) and the timing shift of the Anniversary Sale versus last year (300 basis points),” explained Carden, who has a Market Perform rating on the stock. “Sales in Nordstrom Rack decreased 4.1%, which included a 500-basis-point headwind from the elimination of store fulfillment for Nordstrom Rack digital order.”
Telsey Advisory Group analysts lowered the price target for JWN to $19 from $21, maintaining a Market Perform rating on the stock.
It was a ” nice Q2 beat, but trends decelerated in Q3,” they said. “Given decelerating sales trends quarter-to-date in Q3 and an overall cautious consumer landscape, the company maintained its prior FY23 outlook for a MSD sales decline and modest EBIT margin expansion.”
“Additionally, we believe JWN has additional company-specific merchandising issues across its banners that it is addressing, notably in the important women’s apparel category. That said, we are encouraged by the strategies of the company and the early progress in the Rack business,” the analysts added.