Nordstrom forecast annual revenue and profit largely below Wall Street expectations on Tuesday, signalling a slower-than-expected rebound in demand even as consumers see some relief from easing inflationary pressures.
The department store chain’s shares fell about 4 percent after the bell.
With costs related to healthcare, restaurants and housing at elevated levels, Nordstrom joins peer Macy’s in signalling weak 2024 sales as retailers brace for another year where spending on non-essential items such as apparel and household equipment is likely to remain pressured.
This comes at a time when US prices picked up in January, but the annual increase in inflation was the smallest in nearly three years.
Nordstrom expects 2024 revenue to be between down 2 percent and up 1 percent, while analysts had expected an increase of 0.04 percent, according to LSEG data.
The company forecast annual profit per share in a range of $1.65 to $2.05, while analysts had expected $1.98.
The company reported fourth-quarter total revenue of $4.42 billion, beating estimates of $4.39 billion, mainly driven by strong demand for footwear and beauty products during the holiday season.
Sales at Nordstrom’s discount banner Rack rose 14.6 percent, while the company’s eponymous label recorded a 3 percent drop in revenue.
The company has been working to bring in trendier products at its Rack stores in a bid to attract lower-income consumers who have been pressured by elevated costs of living.
Nordstrom has also bet on increasing the number of Rack stores with 26 new openings planned for this year and spring 2025, while Macy’s expects to open 15 new Bloomingdale’s and 30 new Bluemercury stores over the next three years to speed up growth of its better-performing luxury brands.
Excluding items, Nordstrom earned 96 cents per share in the fourth quarter, compared to estimates of 88 cents, on easing supply costs and lower markdowns.
By Ananya Mariam Rajesh; Additional reporting by Kate Masters; Editing by Shounak Dasgupta
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Nordstrom Revenue Sags as Inflation Turns Holiday Shoppers Picky
Nordstrom missed Wall Street targets for third-quarter revenue on Tuesday as sticky inflation pressured consumer spending in the months leading up to the all-important holiday shopping season.
