Nordstrom Inc. (NYSE:JWN), the Seattle based retailer, cuts its profit and sales forecasts after disappointing third-quarter results yesterday, becoming the latest chain to warn of weak spending by consumers heading into the holiday season.
The share price dropped more than 17% to $52 per share in early morning trading on Friday.
Nordstrom reported earnings per share of $0.42, missing Bloomberg's consensus estimate of $0.72. The company said this reflected transaction costs related to the $2.2 billion-sale of its credit card portfolio to TD Bank in October.
Sales rose 6% in the third quarter, to $3.3 billion. Comparable sales, at stores open for at least one year, rose 0.9%, missing the forecast for growth of 3.6%
Nordstrom lowered its 2015 fiscal year earnings guidance to $3.40 to $3.50, from the previous outlook of $3.70 to $3.80, after the disappointing quarter.
Nordstrom executives didn’t have a ready explanation for the falloff beyond saying there were fewer people buying clothes in the period than they had expected. The retailer moved quickly to mark down goods that weren’t selling, and as a result it didn’t end the period with excess merchandise similar to some of its peers.
According to said Jamie Nordstrom, president of Nordstrom “It’s just a traffic thing. We’ve got less people buying clothes this quarter than we expected. And there’s really nothing else to point to.”
The entire retail market is not doing well this season. On Wednesday, Macy’s Inc. (NYSE:M ) made a statement that it would have to make heavy markdowns to clear unsold goods after sales fell short in its most recent period, which dragged the stock to a two-year low. J.C Penny Company Inc. (NYSE:JCP) share price dropped more than 18% after the disappointing third quarter earnings report.