Nordstrom Thursday reported lower sales and profit for the holiday quarter, although revenue beat Wall Street expectations.
The company said it expects sales to decline in the new fiscal year, reflecting its decision to wind down its Canadian operations.
“We entered Canada in 2014 with a plan to build and maintain a long-term business here. Despite our best efforts, we do not see a realistic path to profitability for Canadian businesses,” said CEO Eric Nordstrom. in a statement Thursday.
Here are the department store’s fiscal fourth-quarter earnings versus analyst expectations based on Refinitiv estimates:
- Earnings per share: 74 cents vs. 66 cents expected
- Revenue: $4.32 billion vs. $4.34 billion expected
Nordstrom has struggled with slower sales, more discounts and scrutiny from a popular activist investor. Its net income for the period ended Jan. 28 fell to $119 million, or 74 cents per share, from $200 million, or $1.23 per share, a year earlier.
For the new fiscal year, Nordstrom expects revenue to decline 4% to 6%, including the negative impact of Canadian store closures and the positive impact of the 53rd week. It also forecast EPS in the range of 20 cents to 80 cents a year, including the potential impact of the Canadian divestment.
As of Jan. 28, the company said it has six Nordstrom stores and seven Nordstrom Rack stores in Canada.
Before Nordstrom reported earnings, it cut its forecast and said it had been a tough weekend for investors. In January, the department store chain said its net sales for the nine weeks ended Dec. 31 fell 3.5% from a year earlier. During that period, its net sales fell sharply under the Nordstrom Rack banner.
One of the reasons for the disappointing sales? Additional features. Nordstrom said it reduced inventory more than expected in November and December, so it can start the fiscal year with healthy inventory levels.
The company caught the eye and saw its stock rise in February when activist investor Ryan Cohen bought a large stake in the company. Cohen, president GameStop and founder Softinterested in using this position to push for change, including transition Bed Bath and Beyond Nordstrom CEO Mark Tritton.
Cohen bought and then sold a large stake in Bed Bath after criticizing Tritton’s strategy and demanding that the company change.
As of Thursday’s close, Nordstrom shares are up more than 19% this year.
Read the full story of Nordstrom’s success.
