The upscale department-store chain’s same-store sales turned negative, showing the previous quarter’s gain may have been fleeting rather than part of a sustained turnaround.
Nordstrom reported a third-quarter profit of $114 million after reporting a loss a year ago, but the upscale department-store operator saw a key sales measure fall and trimmed its profit outlook for the year.
Nordstrom stock fell as much as 7.6 percent to $37 in after-hours trading Thursday after the results were released. It recouped some of those declines and was trading down 1.3 percent at $39.41 later in the day. The stock had fallen 16 percent this year through Thursday’s close.
The Seattle-based chain earned 67 cents per share in the quarter. That compares with last year’s loss of $10 million, or 6 cents per share. The results surpassed Wall Street expectations as the 11 analysts surveyed by Zacks Investment Research expected earnings of 63 cents per share, on average.
Department-store sales have been under financial pressure as more people shop online, at off-price retailers or spend less money overall on clothing, which makes up a big part of Nordstrom’s business. Nordstrom has been among the best performers in the department-store arena, though its discount stores, called Nordstrom Rack, have been faring better than its department stores.
Net sales increased 2 percent to $3.54 billion. Total revenue was $3.63 billion.
But same-store sales — reflecting sales at established stores across the chain — declined 0.9 percent in the quarter. Analysts surveyed by FactSet expected Nordstrom to report a dip of only 0.3 percent.
Same-store sales — a key retail indicator because it strips out the effects of newly opened and recently closed locations — had risen 1.7 percent in the second quarter.
The third-quarter decline disappointed investors who’d hoped Nordstrom was bucking the mall malaise. The negative turn in same-store sales showed the previous quarter’s gain may have been fleeting rather than part of a sustained turnaround.
The results at the Nordstrom Rack unit were somewhat more encouraging, with a 0.8 percent improvement in same-store sales.
But the company said it expects full-year earnings in the range of $2.85 to $2.95 per share, down slightly from its previous forecast of between $2.85 and $3.
Nordstrom’s results are the latest blow for the beleaguered department-store industry, and they may make the company’s quest to secure financing for a buyout more difficult.
Nordstrom family members have been interested in taking the company private. But last month, those plans were put on hold for the rest of 2017 after banks’ financing offers were deemed too expensive.