(Adds details of appeal in paragraph 6) by Ananya Mariam Rajesh
Nordstrom JWN.N missed Wall Street’s third-quarter revenue targets on Tuesday as soaring inflation weighed on consumer spending in the months leading up to the all-important holiday season. ‘year.
Shares of the upscale department store chain fell nearly 1% in volatile after-market trading.
Retailers Best Buy and Kohl’s also hinted at a sluggish holiday season, as continued high interest rates, food prices and the start of student loan repayment prompt customers to spend less and postpone purchases until the end. last minute.
“Consumers are gradually reducing their purchases…they’re buying paycheck to paycheck,” said Jessica Ramirez, principal analyst at Jane Hali & Associates.
Buyers “prioritize the categories they are interested in,” which allows some segments to perform better than others, she added.
Nordstrom executives said in a call after the earnings release that the business, beauty and accessories segments were driving the sales growth.
They also joined other retailers in emphasizing cautious consumer spending.
The company’s namesake brand reported a 9.4% drop in sales, while discount retailer Rack fell just 1.8%, its smallest decline in five quarters, as efforts to introducing more trendy brands have started to bear fruit.
This development, combined with a reduction in markdowns, allowed the company to post a 180 basis point increase in its quarterly gross margin.
“There weren’t as many discounts as expected, but that may have hurt sales at the upper line…especially at Nordstrom,” said David Swartz, an analyst at Morningstar.
Total revenue fell 6.4% to $3.32 billion, below analysts’ estimates of $3.40 billion, according to LSEG data.
Excluding items, Nordstrom earned 25 cents per share, beating estimates of 13 cents.
Best Buy and Kohl’s cut their annual sales forecasts to account for hard-to-predict consumer demand in an uncertain economy, but Nordstrom maintained its forecast.
The company narrowed the range of its adjusted annual earnings forecast, with the midpoint remaining unchanged.
2023-11-22 01:30:11
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