Miami, Florida, Coral Gables Shops at Merrick Park, Nordstrom Department Store have shoppers walking in.
Jeff Greenberg | Universal Image Group | beautiful pictures
northern on Thursday reported lower revenue and profit for the holiday quarter, despite earnings that beat Wall Street expectations.
The company said it expects sales to decline in the new financial year, partly reflecting its decision to shut down operations in Canada.
“We arrived in Canada in 2014 with a plan to build and maintain a long-term business there. Despite our best efforts, we did not see a realistic path to profitability for the business. industry,” Chief Executive Officer Erik Nordstrom said in a statement Thursday.
Here’s what the department store reported for its fiscal fourth quarter versus what analysts expected, based on Refinitiv estimates:
- Earnings per share: 74 cents vs 66 cents expected
- Revenue: $4.32 billion vs $4.34 billion expected
Nordstrom has struggled with slower sales, more price cuts, and scrutiny from a prominent activist investor. Its net income for the period ended January 28 fell to $119 million, or 74 cents per share, from $200 million, or $1.23 per share, a year earlier.
For the new financial year, Nordstrom expects revenue to decline from 4% to 6%, including the negative impact from store closures in Canada and the positive impact from the 53rd week. It is also expected. EPS of 20 cents to 80 cents for the year, including potential impacts from a Canada slowdown.
As of January 28, the company says it has six Nordstrom stores and seven Nordstrom Rack stores in Canada. Nordstrom said it was shutting down the Canadian e-commerce platform on Thursday. It expects to complete the closure of its Canadian store in Canada by the end of June.
Even before Nordstrom reported earnings, it cut its forecast and told investors it had a rough holiday. In January, the department store chain said its net sales fell 3.5% for the nine-week period ending December 31, compared with the same period a year earlier. Its net sales plummeted during that period with the discount banner, Nordstrom Rack.
One of the reasons for disappointing sales? More discounts. Nordstrom says it drops more merchandise than expected in November and December, so it can start the fiscal year off with better inventory levels.
The company gained attention and saw its shares skyrocket in February, when activist investor Ryan Cohen bought a large stake in the company. Cohen, president of game stop and founder of toughinterested in using that position to drive change — including becoming the old one Outdoor shower bed CEO Mark Tritton off Nordstrom’s board.
cohen bought, and then sold, a large stake in Bed Bath, after criticizing Tritton’s strategy and also pushing for change at that company.
As of the end of Thursday, Nordstrom’s stock was up more than 19% this year.
read in full Nordstrom Earnings Release.
