Nordstrom shares fall after wider-than-expected first-quarter loss

By James Rogers

Department-store chain reaffirms its 2024 guidance

Nordstrom Inc. shares fell 5.6% in extended trading Thursday after the company reported a wider-than-expected first-quarter loss, although revenue topped analysts' estimates.

The department-store chain reported a net loss of $39 million, or a loss of 24 cents a share. Before interest and taxes, Nordstrom (JWN) reported a loss of $21 million.

Sales were $3.335 billion, up from $3.181 billion in the same period last year. Analysts surveyed by FactSet were looking for sales of $3.19 billion and a loss of 7 cents a share. Total company net sales increased 5.1% from the prior year's quarter, and Nordstrom banner net sales increased 0.6%. Net sales at Nordstrom Rack stores increased 13.8% year over year.

Related: Bruce Nordstrom, who helped grow family-led department store chain, dies at 90

Nordstrom's total comparable sales increased 3.8%, well above the 0.8% increase forecast by analysts surveyed by FactSet.

"While we're pleased with our top-line growth, profitability fell short of our expectations," said Nordstrom Chief Executive Erik Nordstrom, in a statement. "Looking ahead, our strong sales performance gives us momentum heading into the rest of the year and the confidence to reaffirm our 2024 guidance."

Speaking during a conference call to discuss the results, the CEO said that roughly half of the first-quarter profitability impact was related to timing.

Related: Nordstrom confirms it's looking to go private, with founding family interested in deal

With regard to timing, Nordstrom's CFO Cathy Smith said that the company had a higher-than-expected increase in its inventory reserves. "Frankly, it was a planning miss," she said. "We will learn, and we will take those learnings into the remainder of the forecast." The CFO also pointed to additional loyalty-related deferred revenue during the first quarter.

There was also an operational impact on Nordstrom's profitability, according to Smith, who pointed to external theft in the company's transportation network. "We have already taken swift action," she said.

For fiscal 2024, the company reiterated its earnings guidance of $1.65 to $2.05 a share, excluding the impact of share repurchase activity, if any. Comparable sales will be in the range of a 1% decline to 2% percent growth, the company said. Analysts surveyed by FactSet are looking for full-year earnings of $1.81 a share and comparable sales growth of 0.7%.

Related: Nordstrom says shoppers are still cautious, but sees fewer discounts this year

Revenue, including retail sales and credit-card revenue, will be between a 2% decline and 1% growth compared to the 53-week fiscal 2023, according to Nordstrom.

Shares of Nordstrom, which recently confirmed that it is looking to go private, are up 14% in 2024, outpacing the S&P 500 index's SPX gain of 9.8%.

-James Rogers

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05-30-24 2018ET

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