Industry-wide department store sales declines continue to startle investors.
After bucking the trend to become one of Wall Street’s top picks among department stores, Nordstrom Inc. missed earnings forecasts in the third quarter.
The earnings release — which showed modest sales gains of 6.6 percent and profit declines of 43 percent — sent the company’s share price tumbling in after market trading Thursday, down nearly 19 percent at press time.
In Q1, market watchers had shrugged of profit declines at the department store chain as the consequences of the company’s strategic investments and acquisitions.
In the second quarter, the firm began to show improved momentum, posting 9 percent gains in net sales and 15 percent growth in profit.
The company said its performance in Q3 was below its expectations, “reflecting softer sales trends that were generally consistent across channels and merchandise categories.”
Watch on FN
Inventory also outpaced sales, increasing 8 percent compared to sales improvement of 6.6 percent.
Net Income: Earnings for the third quarter, ending Oct. 31, 2015, were $81 million, a 43 percent decline from the same year-ago quarter’s income of $142 million.
EPS: Earnings per diluted share were 42 cents, a decline of more than 30 cents year-over-year. (Third quarter diluted EPS in 2014 were 73 cents).
Net Revenue: Net sales increased 6.6 percent to $3.2 billion, from the same year-ago quarter’s sales of $3 billion.
Hit, Miss or Beat: Nordstrom missed market watchers’ estimates for revenues and EPS. Analysts polled by Yahoo Finance had predicted EPS of 73 cents and revenue of $3.4 billion.
