And the hits just keep on coming as the retail earnings continue to roll out in ... well, force is probably not the right word considering the string of lackluster performances being notched on the board of late.
Following the grim precedent set by Macy's and Kohl's, Nordstrom was next to the retail bloodbath with first quarter results best described as dismal. Profit dropped off a cliff everywhere except off-price goods — and on the whole Nordstrom has lowered its expectations for 2016.
Net income was $46 million during Q1, down from $128 million in 2015 at the same time. The steep decline was brought on by sluggish sales and higher-than-expected markdowns.
On the upside, total company net sales were up slightly at 2.5 percent to $3.2 billion, but same-store sales were down 1.7 percent. Full-price sales — the segment that holds U.S. full-line Nordstrom stores as well as Canada and Trunk Club — were down 2.2 percent, with same-store sales down 4.3 percent. Beauty was the bastion of strength in the full-price sector, with the Midwest acting as the top performing region.
Off-price was a much stronger situation on the whole. Net sales for the unit that holds Nordstrom Rack and Nordstromrack.com/HauteLook saw an increase of 11.8 percent and comparable sales increases of 4.6 percent.
“Our first quarter results were impacted by lower than expected sales,” said Blake Nordstrom, co-president of Nordstrom. “In response we have made further adjustments to our inventory and expense plans.
"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.”
All in, Nordstrom has dropped its full-year outlook for sales to 2.5 percent to 4.5 percent from a previous guidance of 3.5 percent of 5.5 percent. They are also forecasting further drops to same-store sales in the 1 percent range — a big step back from the previous prediction of flat growth at worst and slight gains of 2 percent at best.