Nordstrom (NYSE: JWN) cut its financial forecast for the full year, despite reporting positive second-quarter earnings. The slash comes as the company experiences an overflow of inventory and declining demand.
The luxury department store chain reported earnings of USD0.81 per share, compared to the expected USD0.80 a share. Revenue amounted to USD4.1 Billion, higher than analysts anticipated USD3.97 Billion. Furthermore, Nordstrom’s net income for the quarter rose to USD126 Million, from the previous year’s USD80 Million.
“We delivered solid results in the second quarter, with topline growth, increased profitability and continued progress in our strategic initiatives,” said Erik Nordstrom, chief executive officer of Nordstrom, Inc. “While our quarterly results were consistent with our previous outlook, customer traffic, and demand decelerated significantly beginning in late June, predominantly at Nordstrom Rack. We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses to recent trends, and we remain confident in our ability to deliver on our long-term strategic and financial goals.”
Nordstrom now predicts annual sales, including credit card revenue, to rise anywhere from 5% to 7%, down from its previous forecast of 6% to 8%. Additionally, its adjusted earnings forecast was lowered to range between USD2.30 to USD2.60, from the prior USD3.20 to USD3.50.