Nordstrom, Inc. (JWN) Lower Comp Sales Cloud Q1 Earnings Beat

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Nordstrom, Inc. (NYSE:JWN) had good news today for investors: an earnings beat. JWN stock holders, though, focused on yesterday’s bad news — a comp sales decline — pushing shares down more than 4% in pre-market trading.

Nordstrom JWN stock

Net earnings were $63 million and earnings before interest and taxes (“EBIT”) was $151 million, or 4.6% of net sales, compared with net earnings of $46 million and EBIT of $106 million, or 3.3% of net sales, during the comparable period last year.

Net sales increased 2.7% compared with the same quarter last year. Nordstrom said this was consistent with trends experienced over the past year.

Earnings per share were 37 cents versus 26 cents in last year’s comparable quarter. Analysts had expected 27 cents. EPS included an interest expense charge of $18 million, or six cents, related to a $650 million debt refinancing completed in Q1.

Nordstrom yesterday joined Macy’s Inc. (NYSE:M) and Kohl’s Corporation (NYSE:KSS) in reporting weaker-than-expected quarterly same-store sales, with an 0.8% decline in its comparable-store sales for the first quarter ended April 29, compared with flat sales expected by analysts polled by research firm Consensus Metrix.

Off-price retailers like TJX Companies Inc (NYSE:TJX) and Ross Stores, Inc. (NASDAQ:ROST) have been stealing market share from big department stores recently. JWN’s Nordstrom Rack has opened five new stores in the first quarter. That brand saw net sales increase 8.7% and comparable sales grew 2.3% in the quarter.

The government is scheduled today to release its monthly retail sales data, with economists expecting a 0.5% increase for April following two months of declines.

Selling, general and administrative expenses, as a percentage of net sales, of 32% decreased 70 basis points compared with the same period in fiscal 2016. Excluding the non-operational charges of $30 million in 2016, selling, general and administrative expenses increased 24 basis points primarily due to planned technology expenses, the company said.

Nordstrom reiterated its annual outlook for earnings per diluted share of $2.75 to $3.00, net sales increase of 3% to 4% and flat comparable sales. JWN stock has slipped 3.5% this year.

 

 


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