Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Nordstrom shares fall on slow store sales growth
Earnings » Stock drop is the biggest in two years as chain’s same-store sales miss goal.
First Published Aug 15 2014 05:25 pm • Last Updated Aug 15 2014 05:25 pm

New York • Nordstrom Inc., the largest U.S. luxury department-store chain, missed same-store sales estimates in the most recent quarter as the retail industry tries to lure customers with promotions. The shares fell the most in more than two years.

Sales at Nordstrom stores open at least a year and the brand’s website rose 2.7 percent in the second quarter ended Aug. 2, missing the 3.1 percent that Consensus Metrix had estimated. Its full-line department stores saw sales drop 1.2 percent, compared with projections for growth of 1.2 percent. Total comparable sales at all brands, including Nordstrom Rack and HauteLook, increased 3.3 percent.

Join the Discussion
Post a Comment

The company also said its agreement last month to buy Trunk Club, a men’s online clothing service, will reduce full-year earnings by as much as 5 percent.

"If people are looking for something negative, the full-line comparable sales were down," Dorothy Lakner, a New York- based analyst at Topeka Capital Markets, said in an interview. "People may be upset about the Trunk Club acquisition. I can just hear people rolling their eyes saying, ‘Not again.’"

The shares fell 5.2 percent to $65.11 at the close in New York, the biggest decline since May 2012.

The company posted quarterly profit that narrowly beat analysts’ estimates and lifted the low end of its annual earnings forecast.

Net income was 95 cents a share, the retailer said Thursday in a statement. Analysts had estimated 94 cents, on average, according to data compiled by Bloomberg. Nordstrom now expects earnings for the year of at least $3.80 a share, up from an earlier forecast of at least $3.75. Quarterly sales rose 6.1 percent to $3.39 billion.

Nordstrom, which will acquire Trunk Club for $350 million in stock, is looking to reach younger customers shopping in new ways. The retailer expected it would take a few years to develop a product similar to Trunk Club on its own, President Blake Nordstrom said on a conference call.

"It helps them understand a younger customer who isn’t shopping the same way they were shopping 20 years ago," Lakner said. "Here’s a company who understands the customer doesn’t care about channels, the customer wants to get what they want, when they want it, however they want it."

The acquisition is similar to the company’s 2011 purchase of HauteLook Inc., the flash-sales site that sells discounted designer goods for limited periods of time.


story continues below
story continues below

In the second half of the year, Nordstrom plans to open 16 Nordstrom Rack stores, its off-price brand. The retailer will also open three full-line stores, including its first store in Canada.

"They’ve increased their relevancy to a broader swath of people," Tony Scherrer, director of research at Smead Capital Management, said in an interview. The Seattle-based firm, which owns Nordstrom shares, oversees almost $1 billion. "They’re leveraging the core of what they are and who they are in a greater way through different platforms."



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.