US: Nordstrom Q4 earnings tumble 5.6%
- Q4 net profit down 5.6%
- Net sales remain flat
- FY EPS guidance of $3.75-$3.90
Upscale fashion retailer Nordstrom has booked a drop in fourth-quarter earnings and guided for full-year profit below analyst expectations.
Earnings dropped 5.6% to US$268m in the three months ended 1 February, from $284m in the year ago period. The retailer increased markdowns in response to heightened promotional activity during the quarter and experienced higher occupancy costs related to expansion of its Rack stores.
Net sales remained flat at $3.6bn, while same-store sales were up 2.6% compared with last year's increase of 6.3%.
Nordstrom same-store sales, which consist of the full-line and direct businesses, increased 2.2% versus last year's 6.1% increase.
Despite the earnings decline and flat sales, RBC Capital Markets analyst Howard Tubin said it was a "standout performance" in the currently difficult retail environment.
"The positive comp was driven by strength at Rack and DTC. While these divisions drive an outsized portion of the company's investment spending, the investments appear to be paying off."
Nordstrom has guided profit per share for the full year to be in the range of $3.75 to $3.90. This comes in below the average of 28 analysts' estimates compiled by Bloomberg, of $4.07.
The company said it expects its planned entry into Canada to continue to be dilutive to earnings in its new fiscal, primarily due to ongoing infrastructure investments and pre-opening costs.
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