Upscale department store chain Nordstrom reported today a 21 percent drop in second-quarter profit and cut its full-year forecast as its...
NEW YORK — Upscale department store chain Nordstrom reported today a 21 percent drop in second-quarter profit and cut its full-year forecast as its affluent consumers pull back on fashions in a tough economy.
The Seattle-based chain said it earned $143 million, or 65 cents a share, in the three months ended Aug. 2, compared with $180 million, or 71 cents a share, a year earlier.
Total sales fell 4.3 percent to $2.29 billion.
Analysts surveyed by Thomson Reuters had expected a profit of 64 cents a share on revenue of $2.31 billion.
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Nordstrom reported a 6 percent drop in same-store sales for the overall company. Same-store sales, or sales at stores open at least a year, are considered a key indicator of a retailer’s health.
The company said that results at its department stores continue to be challenging, while its discount Nordstrom Rack outlets have maintained strong sales growth. Nordstrom suffered a 9 percent decline in same-store sales, while Nordstrom Rack enjoyed a 6.3 percent gain. Sales for Nordstrom Direct, its e-commerce division, increased 14.6 percent.
The company said it now expects earnings per share for its fiscal year ending Jan. 31 to be in the range of $2.55 to $2.65 a share. That’s down from an earlier forecast of $2.65 to $2.80 a share. Analysts surveyed by Thomson Reuters expected $2.68 a share for the year.
Nordstrom announced its financial results after the regular markets closed. In after-hours trading, its stock was down 82 cents, or 2.7 percent, at $29.40.
On Wednesday, department store chain Macy’s also posted a lower second-quarter profit and warned that its full-year earnings will be below expectations.
That, along with a pared-down outlook from key supplier Liz Claiborne and a somber government report on retail sales in July, suggests a persistent slowdown for retailers as they face the critical back-to-school and holiday shopping seasons.