Nordstrom Inc. late Thursday slashed its fiscal 2022 outlook as it offered shoppers more markdowns in the holiday season but still saw a drop in sales.
net sales in the nine weeks ended Dec. 31 fell 3.5% as compared with the year-ago period, the retailer said. That includes a drop in net sales of 1.7% for its flagship Nordstrom stores and a 7.6% drop for Nordstrom Rack stores.
The stock fell more than 6% in the extended session Thursday, after ending the regular trading day down 0.7%.
“The holiday season was highly promotional, and sales were softer than pre-pandemic levels,” Chief Executive Erik Nordstrom said.
Nordstrom lowered its fiscal 2022 outlook on per-share earnings to between $1.33 a share and $1.53 a share, compared with a previous outlook of between $2.13 a share and $2.43 a share.
The company called for adjusted EPS of between $1.50 a share and $1.70 a share, compared with a prior guidance of between $2.30 a share and $2.601 a share.
Analysts polled by FactSet expect fiscal 2022 adjusted EPS of $2.35.
“While we continue to see greater resilience in our higher-income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment,” Erik Nordstrom said.
Nordstrom tried to right its inventories by taking addditional markdowns.
It expects inventory levels to be down this year by an unspecified double-digit percentage as compared with last year, and roughly about the same as 2019, it said.
“Having a healthier inventory level and mix positions us well to react quickly to changing consumer demand,” said President and Chief Brand Officer Pete Nordstrom.
“Given the continued uncertain environment, we remain focused on executing with flexibility and agility, including conservative buy plans and faster inventory turns,” Pete Nordstrom said.
Nordstrom is also “further optimizing” its supply chain to improve the customer experience and expense efficiency, it said. Such initiatives “will continue to deliver significant benefits in 2023,” Pete Nordstrom said.
The stock has lost 20% in the past 12 months, compared with losses of around 14% for the S&P 500 index
Earlier this month, Macy’s gave a downbeat forecast for its fourth-quarter sales, with management seeing “lulls” in the holiday season and saying customers likely would feel the squeeze from inflation into next year.
Wall Street has worried that retailers will feel the pinch of rising prices and more reluctant shoppers.