Nordstrom's results reflect cautious consumer spending, echoing department store sector blues.

2023-08-25 04:16

Nordstrom says its sales and profits fell in its fiscal second quarter, joining its department store peers coping with shoppers' cautious spending

NEW YORK (AP) — Nordstrom on Thursday reported that its sales and profits fell in its fiscal second quarter, joining its department store peers coping with shoppers' cautious spending.

But its results still topped Wall Street expectations. The Seattle-based upscale department store also reaffirmed its financial annual outlook. Its stock rose 4% in after-hours trading.

Nordstrom’s sales were affected by the timing of the company’s anniversary sale, with one week falling into the third quarter this year compared to one day in 2022. Moreover, last year’s results included a full quarter of sales from its Canadian operations, which the company wound down in June of this year.

Nordstrom reported net income of $137 million, or 84 cents per share, for the quarter ended July 29. That compares with $126 million, or 77 cents per share, in the year-ago period.

Total sales fell 7.9% to $3.77 billion from $4.09 billion in the quarter.

Analysts were expecting 45 cents per share on $3.67 billion, according to FactSet.

Nordstrom said it expects a revenue decline between 4% to 6% for the year compared with a year ago. It also expects earnings per share of between $1.80 per share to $2.20 per share for the year, excluding charges related to the wind-down of its Canadian operations. Analysts expect $1.98 per share, according to FactSet.

Its results follow Kohl’s, which reported on Wednesday that profits dropped nearly 60% due to weak second-quarter sales. On Tuesday, Macy’s said it was forced to discount its spring goods to make room for fall and holiday merchandise in the face of customers’ muted spending.

The reports come as shoppers are still dealing with high inflation and higher interest rates that are making it more expensive to take out a loan on a car or a house or carry debt on credit cards.

Macy's also cited a faster-than-anticipated rise in credit card delinquencies, signaling more financial pressure for shoppers in the second half of the year. And many stores are flagging uncertainty over the end of the student loan moratorium, which had provided one-time college students a little more financial breathing room.