A Citibike docking station in front of the Nordstrom flagship store in New York, U.S., on Wednesday, February 21, 2024.
Bing Guan | Bloomberg | fake images
Nordstrom on Thursday missed Wall Street's quarterly profit expectations as its off-price chain Rack outperformed the rest of its stores.
Despite falling profits, the Seattle-based department store operator posted sales growth and maintained its full-year forecast.
Here's what the retailer reported for its fiscal first quarter compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Loss per share: 24 cents vs. 8 cents expected
- Revenue: $3.34 billion vs. $3.2 billion expected
Nordstrom shares fell about 7% in extended trading.
Nordstrom has leaned on its off-price chain, Nordstrom Rack, to drive growth. It has been opening more Rack stores, including nine during the quarter. It is on track to open a total of 22 new Rack stores this year.
However, Rack, which offers brands at cheaper prices, has fallen behind rivals such as TJ Maxx, owned by TJX and Marshalls.
However, in the quarter the discount chain showed signs of progress. It surpassed Nordstrom's flagship brand with comparable sales increasing 7.9% year over year. Comparable sales of the company's flagship brand increased 1.8%.
The retailer reaffirmed that it expects profits of between $1.65 and $2.05 for the full fiscal year. Nordstrom anticipates full-year revenue will be in a range of a 2 percent decline to 1 percent growth from the prior year.
For its fiscal first quarter, Nordstrom posted a net loss of $39 million, down from a net loss of $205 million in the prior-year period. The company's total revenue rose to $3.34 billion from $3.18 billion a year earlier.
In the quarter, Nordstrom said women's, children's and activewear saw strong double-digit growth compared to a year ago. Sales of beauty products also increased in the high single digits, the company said.
The results come as the Nordstrom family again considers taking the company private. Last month, he said he formed a special committee to evaluate the bids.
The company's quarterly results on Thursday were the first since former Chairman Bruce Nordstrom, father of CEO Erik Nordstrom and Chairman Pete Nordstrom, died earlier this month.
Nordstrom, like its department store rivals, is trying to win over younger shoppers as it relies on older customers.
