Nordstrom (JWN) shares fell more than 10% in early trading Friday after the retailer reported lower sales amid a broader drop in discretionary spending and executives warned of record levels of retail theft.
KEY THINGS TO REMEMBER
- Nordstrom shares fell in early trading on Friday after the retailer reported lower sales.
- Sales were down 8.3% from the same period last year and are below pre-pandemic levels.
- Nordstrom attributed the decline in part to timing for its anniversary sale and closing. stores in Canada.
Nordstrom reported second-quarter revenue of $3.77 billion, better than expectations of $3.65 billion, and earnings per share of $0.84 versus an estimate of $0.44 $. However, sales were down 8.3% from the same period last year and remained below pre-pandemic levels.
Nordstrom attributed the decline in part to the timing of its anniversary sale and the closure of its stores in Canada. It also said an increase in theft-related losses impacted its bottom line.
"Losses due to theft are historic peaks. And I would say we find that unacceptable and needs to be addressed,” he said. CEO Erik B. Nordstrom said on the earnings call.
Nordstrom added that credit card delinquencies were on the rise, which could lead to higher credit losses in the second half of this year and in 2024. Nordstrom echoed warnings from other major retailers such as than Macy's, which reported a 41% drop in sales. credit card income.
Going forward, Nordstrom said he expects the challenges to be demanding. “It remains to be seen how changes in inflation and rising interest rates will affect discretionary consumer spending in the second half of the year, particularly over the holiday season,” he said. added. said Chief Financial Officer Catherine R. Smith. The company said it now expects revenue to decline 4-6% for the year.
With Friday's losses, Nordstrom shares are down 6% year-to-date.
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