Nordstrom slumps after missing on comparable sales and slashing guidance
- Nordstrom beat on both the top and bottom lines.
- But the retailer's comparable sales fell short of Wall Street expectations.
- The company also slashed its full-year guidance.
- Watch Nordstrom trade live.
Nordstrom shares plunged as much as 16% Friday, their biggest intraday decline in more than two years, after the retailer disappointing comparable sales and trimmed its full-year guidance.
Here are the key numbers compared to Wall Street's estimates, according to Bloomberg data.
- Adjusted earnings per share: $0.67 ($0.66 expected)
- Revenue: $3.75 billion ($3.69 billion expected)
- Same-store sales: +2.3% (+2.4% expected)
- Full-year earnings guidance: $3.50 to $3.65, down from $3.55 to $3.65 ($3.63 expected)
- Full-year sales guidance: $15.4 billion to $15.5 billion, down from $15.5 billion to $15.6 billion ($15.9 billion expected)
The earnings adjustment reflected a non-recurring estimated credit-related charge of $0.28, and the outlook excluded the estimated credit-related charge, according to the company.
"This estimated charge resulted from some delinquent Nordstrom credit card accounts being charged higher interest in error," Nordstrom said in a press release.
"Excluding this estimated charge, which was not incorporated in the Company's prior outlook, earnings slightly exceeded the Company's expectations, reflecting continued top-line strength across its Full-Price and Off-Price businesses."
In a note to sent out to clients on Thursday, RBC analyst Brian Tunick said, "Nordstrom's Q3 print is viewed as disappointing given heightened expectations following very strong Q2 results."
He added: "While we are encouraged by Nordstrom's initiatives and investments in store selling, differentiated product, e-commerce, and off- price, we expect recent weakness in top-line trends to persist while the continuing investment cycle prevents earnings flow- through and the stretched balance sheet does not leave a lot of room for shareholder cash returns via buybacks."
Tunick lowered his price target to $60 from $62 - 18% above where shares were trading Friday - and maintained a "sector perform" rating.
Nordstrom was up 4% this year.
Now read:
- Analyst says Nordstrom has become a 'victim of its own success' as customers ditch stores to shop on its website
- Department stores see digital promise, mixed Q2 results
