Nordstrom Comp Sales Down In Q1

Nordstrom shares slid over 10 percent on Friday following an earnings report that, while mostly a beat on analyst expectations and in-line with the company’s goals, showed a significant decline in comp sales.

First, the positive news. Across brands, Nordstrom saw $63 million in net earnings in Q1 2017, 4.6 percent of net sales, which came in at $3.3 billion, up 2.7 percent from the same period last year. Nordstrom posted $0.37 diluted earnings per share for the quarter, in-line with company expectations and up from $0.26 diluted eps last year.

“Over the past decade, we’ve transitioned from being a predominantly mall-based store business to one that is more diversified,” said co-president Blake Nordstrom in the company’s earnings call. “We’ve invested in capabilities to better serve our customers and gain market share… our business looks very different today. Nearly one-quarter of our sales are from online purchases compared to roughly 5 percent from 10 years ago.”

Across brands, Nordstrom reported that online sales made up 24 percent of total net sales. Likewise, total customers were reported to have grown year-on-year as the company worked to draw in new customers.

But investors weren’t pleased when it came to Nordstrom’s comp sales, which saw a net decrease of 0.8 percent for the quarter. The Nordstrom brand—full-line stores in the U.S. and Canada, Nordstrom.com and Trunk Club—saw comp sales down a full 2.8 percent. The Nordstrom Rack brand saw comp sales up 2.3 percent.

To date, the company closed one full-line store and opened six Nordstrom Rack stores, in line with larger industry trends. For the full year, Nordstrom’s outlook remains unchanged, expecting earnings per diluted share of between $2.75 and $3.00 with a 3 to 4 percent increase in net sales flat comp sales in 2017.