The JPMorgan Chase analyst cited the company’s higher spending to get more customers in the doors and to shift toward e-commerce, with management seeing “no silver bullets” in 2017.
Nordstrom shares plunged nearly 9 percent Friday, following a downgrade on the stock by a Wall Street analyst.
The upscale clothier’s shares closed Friday at $50.48, down by $4.80 or 8.7 percent.
Nordstrom’s biggest drop in seven months came after JPMorgan Chase analyst Matthew Boss downgraded the company’s shares from neutral to the equivalent of sell, and trimmed his 12-month target share price to $48 from $55, according to Bloomberg Markets.
In a note to clients Friday, Boss cited the company’s higher spending to get more customers in the doors and to shift toward e-commerce, with management seeing “no silver bullets” in 2017, according to Bloomberg Markets.
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Nordstrom has been weathering a tough period amid an overall apparel retail slump, with lower-than-expected sales and profits several quarters in a row, and layoffs earlier this year. Its more recent quarters have yielded cheerier news as the company beat Wall Street expectations.
But challenges remain as its full-line stores continue to see worrying sales fall-offs.
And as consumer shopping increasingly shifts online, Nordstrom has made big investments in its tech offerings, improving its website and pushing out more features for its mobile app.
Those efforts have paid off, as sales for Nordstrom.com, Nordstromrack.com and the company’s flash sale site HauteLook have all been increasing. Online sales now account for more than a fifth of the company’s total.
But it’s also come at a price: Mike Koppel, the company’s chief financial officer, said earlier this year that the cost of building out its e-commerce infrastructure has grown faster than sales.
And the company recently took a $197 million write-down for its $350 milllion purchase two years ago of online styling service Trunk Club.