Miami, Florida, Coral Gables stores in Merrick Park, Nordstrom department store with shopper entrance.
Jeff Greenberg | Universal group of images | Getty’s paintings
Nordstrom on Thursday reported lower sales and profits for the vacation quarter, although profits beat Wall Street expectations.
The corporate said it expects sales to say no in the brand new fiscal 12 months, partly reflecting its decision to shut operations in Canada.
“We entered Canada in 2014 with a plan to construct and maintain a long-term business there. Despite our greatest efforts, we don’t see a practical path to profitability for Canadian businesses,” CEO Erik Nordstrom said in a Thursday announcement.
Here’s what the department store reported for its fiscal fourth quarter in comparison with analysts’ expectations, based on estimates by Refinitiv:
- 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 markdowns, and scrutiny from a distinguished activist investor. Its net income for the period ended Jan. 28 fell to $119 million, or 74 cents a share, from $200 million, or $1.23 a share, a 12 months earlier.
Nordstrom expects revenue to fall 4% to six% in the brand new fiscal 12 months, including the negative impact of store closures in Canada and the positive impact of Week 53. It also projected an EPS of 20 cents to 80 cents for the 12 months, which also includes the potential effects of a Canadian liquidation.
As of January 28, the corporate said it had six Nordstrom stores and 7 Nordstrom Rack stores in Canada. Nordstrom said it discontinued its Canadian e-commerce platform on Thursday. It expects Canadian store closures to be accomplished in Canada by the tip of June.
Even before Nordstrom announced profits, it lowered its forecasts and told investors it had had a rough holiday. In January, the department store chain said its net sales were down 3.5% within the nine-week period ended December 31 in comparison with a 12 months ago. Its net sales plummeted during this era on the discounted banner, the Nordstrom Rack.
Considered one of the explanations for the disappointing sales? More discounts. Nordstrom said it discounted goods greater than expected in November and December so it could start the fiscal 12 months with healthier stock levels.
The corporate gained attention and saw its shares surge in February when activist investor Ryan Cohen bought a big stake in the corporate. Cohen, president Stop the sport and founder Chewingis considering using this position to press for change – including getting the old position A shower in bed and more CEO Mark Tritton off Nordstrom board.
Cohen bought and later sold a big stake in Bed Bath after criticizing Tritton’s strategy and pushing for change in that company as well.
Since Thursday’s close, Nordstrom’s shares are up greater than 19% this 12 months.
Read the entire thing Nordstrom results published.