Nordstrom Q1 Comps, Earnings Slip

In the first quarter ended April 30, Nordstrom recorded net earnings of $46 million, or 26 cents per diluted share, versus $128 million, or 66 cents per diluted share, in the year-earlier period. Comparable store sales slipped 1.7%.

Nordstrom missed an analyst average estimate of 46 cents per diluted share published by Marketbeat.

Net sales were $3.19 billion versus $3.12 billion in the year-prior quarter.

Nordstrom maintained that first quarter earnings were below the company's expectations primarily because of lower than planned sales and higher markdowns to align inventory and current trends. First quarter results included a 10-cent reduction in earnings per diluted share due to higher credit chargeback expenses associated with an industry change in liability rules effective October 2015 in addition to severance charges related to the realignment of corporate support functions.

Full-price net sales, which consist of department stores in the United States and Nordstrom.com, combined with Canada and Trunk Club, decreased 2.2% as comps retreated 4.3%. In prepared conference call remarks, while not breaking out components, the company said the softness in the division was broad based across operations.

In U.S. full-line stores and Nordstrom.com, the top-performing merchandise category was beauty. Younger customer-focused departments in women's apparel were also strong, reporting positive comps, the company noted. The Midwest was the top-performing full-price geographic region.

As for off-price sales, generated by Nordstrom Rack stores and Nordstromrack.com/HauteLook, net gained 11.8% as comps increased 4.6%. The east was the top-performing region for off-price sales advances, the company noted.

“Our first quarter results were impacted by lower than expected sales,” said Blake Nordstrom, the retailer's co-president. “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.”

So far in fiscal 2016, Nordstrom relocated one full-line department store, in Honolulu, HI, and opened six Rack locations in Louisiana, Utah, Virginia, Colorado, California and Arizona. Nordstrom operates 329 stores in 39 states, including 121 full-line stores and 200 Nordstrom Rack stores.