Nordstrom’s 3Q15 earnings
Nordstrom (JWN) reported its 3Q15 results after the close of financial markets on November 12. The upscale department store disappointed investors with 3Q15 adjusted EPS (earnings per share) of $0.57, missing the consensus Wall Street earnings estimate of $0.72. The company’s third quarter of fiscal 2015 ended on October 31, 2015.
Headwinds in 3Q15
Nordstrom’s earnings fell in 3Q15 despite a 6% rise in sales. We’ll discuss the company’s sales in the next part of this series. Nordstrom’s adjusted EPS fell by 21.9% in 3Q15 from the comparable quarter of the previous year. The company’s adjusted EPS excludes the impact of one-time items.
The fall in Nordstrom’s earnings in 3Q15 was a result of its growth investments. The impact of the Trunk Club acquisition and the ongoing growth plans in Canada led to an incremental reduction to EBIT (earnings before interest and taxes) of $20 million in 3Q15 compared to 3Q14.
Including the impact of one-time items, the company’s diluted EPS fell to $0.42 in 3Q15, from $0.73 in 3Q14. The transaction costs associated with the sale of the company’s credit card portfolio reduced the 3Q15 diluted EPS by $0.15. The company announced the sale of its credit portfolio to Toronto-Dominion Bank (TD) on October 1, 2015.
Nordstrom makes up 0.04% of the portfolio holdings of the iShares Core S&P 500 ETF (IVV).
3Q15 results pull down stock
Nordstrom’s stock fell by 15% to $53.96 on November 13, the day following the company’s 3Q15 results announcement. Markets reacted sharply to the news of a slowdown in the company’s sales and lowered guidance. Nordstrom’s 3Q15 results followed disappointing results by Macy’s (M) on November 11. Macy’s reported an 8.2% fall in its 3Q15 adjusted EPS due to lower sales.
The stock price of JCPenney (JCP) fell by 15.4% on November 13, the day its 3Q15 results were announced. JCPenney beat consensus earnings estimates in 3Q15. The company reported a loss of $0.47 per share in 3Q15, a lower loss compared to the consensus analyst estimate of a $0.56 loss. Kohl’s (KSS) adjusted EPS came in at $0.75, beating the consensus analyst estimate of $0.69 in 3Q15.