Nordstrom slumps after missing on comparable sales and slashing guidance

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  • Nordstrom beat on both the top and bottom lines.
  • But the retailer’s comparable sales fell short of Wall Street expectations.
  • The company also slashed its full-year guidance.
  • Watch Nordstrom trade live.

Nordstrom shares plunged as much as 16% Friday, their biggest intraday decline in more than two years, after the retailer disappointing comparable sales and trimmed its full-year guidance.

Here are the key numbers compared to Wall Street’s estimates, according to Bloomberg data.

  • Adjusted earnings per share: $US0.67 ($US0.66 expected)
  • Revenue: $US3.75 billion ($US3.69 billion expected)
  • Same-store sales: +2.3% (+2.4% expected)
  • Full-year earnings guidance: $US3.50 to $US3.65, down from $US3.55 to $US3.65 ($US3.63 expected)
  • Full-year sales guidance: $US15.4 billion to $US15.5 billion, down from $US15.5 billion to $US15.6 billion ($US15.9 billion expected)

The earnings adjustment reflected a non-recurring estimated credit-related charge of $US0.28, and the outlook excluded the estimated credit-related charge, according to the company.

“This estimated charge resulted from some delinquent Nordstrom credit card accounts being charged higher interest in error,” Nordstrom said in a press release.

“Excluding this estimated charge, which was not incorporated in the Company’s prior outlook, earnings slightly exceeded the Company’s expectations, reflecting continued top-line strength across its Full-Price and Off-Price businesses.”

In a note to sent out to clients on Thursday, RBC analyst Brian Tunick said, “Nordstrom’s Q3 print is viewed as disappointing given heightened expectations following very strong Q2 results.”

He added: “While we are encouraged by Nordstrom’s initiatives and investments in store selling, differentiated product, e-commerce, and off- price, we expect recent weakness in top-line trends to persist while the continuing investment cycle prevents earnings flow- through and the stretched balance sheet does not leave a lot of room for shareholder cash returns via buybacks.”

Tunick lowered his price target to $US60 from $US62 – 18% above where shares were trading Friday – and maintained a “sector perform” rating.

Nordstrom was up 4% this year.

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