© Reuters. FILE PHOTO: A Nordstrom retailer is pictured in New York, U.S., March 1, 2021. REUTERS/Brendan McDermid/File Picture
By Granth Vanaik
(Reuters) – Nordstrom Inc (NYSE:) mentioned on Tuesday web gross sales at its eponymous retail shops fell 3.4% in its third quarter, and total gross sales for the corporate slowed down previously couple of months, “significantly in geographies with unseasonably heat climate.”
The corporate additionally trimmed its web revenue forecast for the fiscal yr ending January 2023. Shares within the upmarket Seattle-based retailer fell about 9% in prolonged buying and selling.
Nordstrom, like rival retailers, has been providing steep reductions to clear extra and outdated stock, with the corporate anticipating extra promotions throughout the retail trade by the important thing vacation quarter.
The markdowns have harm margins, as have rising uncooked materials and labor prices, and provide chain disruptions.
Chief Government Erik Nordstrom mentioned Nordstrom was clearing extra stockpiles to exit the yr with wholesome stock ranges, as the corporate girds in opposition to a downturn that had “impacted all buyer segments, with outsized affect within the lowest earnings teams.”
He additionally mentioned gross sales had improved within the final two weeks.
Some clients have been ready till nearer to Christmas to make their purchases, the corporate mentioned.
“Nordstrom is trying to make the most of promotions to work their approach by stock, simply as the remainder of the sector is,” mentioned Simeon Siegel, senior analyst at BMO Capital Markets.
Within the third quarter, gross sales in its off-price division — Nordstrom Rack — fell 2%. Whole income fell 2.4% to $3.55 billion, however beat analysts’ expectations of $3.47 billion, in keeping with Refinitiv information.
The corporate reported a web lack of $20 million, or 13 cents per share, for the quarter ended Oct. 29, in contrast with a revenue of $64 million, or 39 cents per share, a yr earlier. The quarter included a provide chain technology-related asset impairment cost.
Nordstrom’s adjusted earnings of 20 cents per share topped estimates of 13 cents. It expects an annual revenue of $2.13 and $2.43, excluding share repurchase exercise, trimmed from $2.45 to $2.75 beforehand.