SEATTLE - Nordstrom, Inc. (NYSE: NYSE:JWN) experienced a 7.5% decline in its stock price following the announcement of its first quarter results, which missed analyst expectations.
The company reported a loss per share of -$0.24, which was notably lower than the analyst estimate of -$0.07. Despite this earnings shortfall, revenue for the quarter was slightly higher at $3.22 billion, surpassing the consensus estimate of $3.19 billion.
The first quarter saw a 5.1% increase in net sales compared to the same period last year, with total company comparable sales up by 3.8%. Nordstrom Rack, the company's off-price retail division, showed particularly strong performance with a 13.8% increase in net sales and a 7.9% rise in comparable sales. However, gross profit was impacted negatively by various factors including timing issues, loyalty activities, and external theft in the company's transportation network.
Erik Nordstrom, CEO of Nordstrom, Inc., acknowledged the encouraging sales growth across the company, especially the progress made by Nordstrom Rack. He stated, "While we're pleased with our topline growth, profitability fell short of our expectations." He also reaffirmed the company's fiscal 2024 outlook, expressing confidence in the momentum gained from strong sales performance.
For fiscal year 2025, Nordstrom anticipates an earnings per share (EPS) range of $1.65 to $2.05. This guidance range's midpoint of $1.85 is slightly above the analyst consensus of $1.79, indicating a potentially brighter outlook despite the current quarter's earnings miss.
The company's stock movement reflects investor reaction to the earnings miss, with a significant 7.5% drop. The market's response suggests concerns over profitability, despite the sales growth and positive performance of Nordstrom Rack. Nordstrom's management remains focused on priorities for the year ahead, emphasizing the importance of inventory health and compelling content for customers.
Pete Nordstrom, president of Nordstrom, Inc., emphasized the company's preparedness for the future, "We're set up well going forward in regards to the health of our inventory, both in managing levels and providing compelling content with good sell-through."
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