Nordstrom, Inc. reported Q1 earnings for the period ended April 30, 2016 and the news wasn’t good. While sales increased 2.5% to $3.2 billion, comp sales decreased 1.7%, compared with the same period last year.
In addition, Nordstrom now says same store-sales could fall this year, according to Barrons, projecting full-year 2016 comparable sales running a range from a 1% decline to a 1% rise, compared to the previous predictions for sales to remain flat or rise. Nordstrom also cut its full-year earnings per share EPS expectations to $2.50 to $2.70, from the previous forecast of $3.10 to $3.35.
Shares plunged 16% after the news.
Nordstrom posted Q1 earnings of 26 cents per diluted share on $3.25 billion in revenue. Profit fell from 66 cents per share in the prior-year period, while sales rose slightly from $3.22 billion.
First quarter net earnings were $46 million and earnings before interest and taxes (EBIT) were $106 million, or 3.3% of net sales, compared with net earnings of $128 million and EBIT of $245 million, or 7.9% of net sales, during the same period in fiscal 2015.
“Our first quarter results were impacted by lower than expected sales. In response we have made further adjustments to our inventory and expense plans,” said Blake Nordstrom, co-president, Nordstrom, Inc. “As the pace of change in retail continues to accelerate, we remain committed to serving customers by taking steps that will continue to meet their expectations while driving profitable growth.”
Full-price net sales (U.S. full-line stores and Nordstrom.com, combined with Canada and Trunk Club), decreased 2.2% and comparable sales decreased 4.3%.
Across U.S. full-line stores and Nordstrom.com, the top-performing merchandise category was Beauty. The younger customer-focused departments in Women’s Apparel continued to reflect strength with positive comparable sales increases. The Midwest was the top-performing full-price geographic region.
Off-price net sales, which consist of Nordstrom Rack stores and Nordstromrack.com/HauteLook, increased 11.8% and comp sales increased 4.6% . The East was the top-performing off-price geographic region.
Nordstrom is also opening up off-price stores at a faster clip.
To date in fiscal 2016, the Company relocated one full-line store and opened six Nordstrom Rack stores.