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Nordstrom shares drop more than 20% on missed earnings, rising costs

Shares of Nordstrom Inc. fell more than 20% in extended trading on Tuesday after the retailer reported mixed quarterly results and said it needed to “move faster” to increase market share amid high spending. labor costs and rising costs.

Nordstrom
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said it earned $64 million, or 39 cents a share, in the third quarter, compared with $53 million, or 34 cents a share, in the year-ago period, including 19 tax benefits million dollars related to the CARES Act.

Sales rose 18% to $3.6 billion, but down 1% year-on-year, the company said.

Nordstrom said the third-quarter sales included about a week from the retailer’s anniversary sale, which lifted the quarterly results by about 200 basis points.

The FactSet consensus calls for earnings per share of 57 cents on $3.5 billion in sales for the quarter.

Nordstrom has “long benefited” from a focus on customer service, merchandise mix, brand partnerships and other strengths, but it’s time to “move faster to take advantage of these advantages.” strengths and profitable growth in market share,” Chief Executive Officer Erik Nordstrom said in a statement.

Furthermore, Nordstrom is “taking action to improve performance at Nordstrom Rack, including optimizing inventory levels, better balancing price points, and increasing brand awareness,” he said.

The company said selling and administrative expenses increased in the quarter mainly due to labor costs. Nordstrom is working to improve cargo margins to ensure it can serve customers “seamlessly, despite global supply chain challenges,” it said.

The company reiterated its fiscal 2021 outlook for total revenue up more than 35% from fiscal 2020.

Shares of Nordstrom end the normal trading day down 1.2%

https://www.marketwatch.com/story/nordstrom-stock-plunges-more-than-20-on-earnings-miss-rising-costs-11637704039?rss=1&siteid=rss Nordstrom shares drop more than 20% on missed earnings, rising costs

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