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Nordstrom shares (JWN) fell over 10% in early buying and selling on Friday after the retailer reported a drop in gross sales amid a broader decline in discretionary spending and executives warned about document ranges of retail theft.
KEY TAKEAWAYS
- Nordstrom shares tumbled in early buying and selling on Friday after the retailer reported a drop in gross sales.
- Gross sales had been down 8.3% in comparison with the identical interval a 12 months in the past and beneath pre-pandemic ranges.
- Nordstrom attributed the decline partially to the timing of its anniversary sale, and shutting shops in Canada.
Nordstrom reported income of $3.77 billion for the second quarter, above expectations of $3.65 billion, and earnings per share of $0.84 in comparison with estimates of $0.44. Nonetheless, gross sales had been down 8.3% in comparison with the identical interval a 12 months in the past, and remained beneath pre-pandemic ranges.
Nordstrom attributed the decline partially to the timing of its anniversary sale and shutting shops in Canada. It additionally mentioned an increase in losses associated to theft impacted its outcomes.
“Losses from theft are at historic highs. And I would say we discover it unacceptable and must be addressed,” mentioned CEO Erik B. Nordstrom throughout the earnings name.
Nordstrom added that bank card delinquencies had been rising, which it mentioned may lead to greater credit score losses within the second half of this 12 months and 2024. Nordstrom echoed warnings from different huge retailers equivalent to Macy’s, which reported a 41% stoop in bank card income.
Going ahead, Nordstrom mentioned it expects challenges to demand. “It stays to be seen how adjustments in inflation and better rates of interest will have an effect on discretionary shopper spending within the second half of the 12 months, significantly throughout the vacation season,” mentioned CFO Catherine R. Smith. The corporate mentioned it now anticipates income to fall 4% to six% for the 12 months.
With Friday’s losses, shares of Nordstrom had been down 6% year-to-date.
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