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Nordstrom’s Holiday Sales: Another Department Store Disappoints

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Jan. 16 2019, Published 1:08 p.m. ET

Nordstrom stock down

Nordstrom (JWN) stock declined about 4% in after-hours trading on January 15 after the company reported weak same-store sales for the holiday period. Nordstrom stock was down over 7% at 6:15 AM EST on January 16.

Nordstrom posted same-store sales growth of 1.3% in the nine weeks ended January 5, 2019. According to the upscale department store chain, same-store sales of its full-price business grew by just 0.3% due to softer consumer traffic. Nordstrom’s off-price business delivered same-store sales growth of 3.9% in the holiday period.

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Nordstrom’s digital sales grew 18% over the holiday period and accounted for 36% of the overall sales. The lower-than-expected sales of its full-price business caused the company to book higher markdowns, and thus Nordstrom now expects its fiscal 2018 EPS at the low end of its previously issued guidance of $3.27 to $3.37. Excluding the impact of a non-recurring credit-related charge, the company expects its adjusted EPS at the low end of its previous forecast of $3.55 to $3.65.

Holiday season failed to bring joy

Nordstrom joins its department store peers Macy’s (M), Kohl’s (KSS), and JCPenney (JCP), which failed to impress investors with their holiday sales. Macy’s reported same-store sales growth of 0.7% (on an owned basis) for the holiday period, which consists of November and December 2018. Kohl’s reported same-store sales growth of 1.2% over the holiday period (nine weeks ended January 5, 2019). JCPenney’s struggle continued in the holiday period, and the company reported a same-store sales decline of 3.5% on a shifted basis in the holiday period and a 5.4% drop on an unshifted basis.

Nordstrom’s sales performance in the holiday season again reflected the outperformance of its digital channels and off-price Rack business compared to its full-line business. In the third quarter of fiscal 2018, which ended on November 3, Nordstrom’s same-store sales grew 2.3% driven by 5.8% same-store sales growth of the off-price business, while full-price same-store sales were up by a mere 0.4%.

Nordstrom stock fell 1.6% in 2018. As of January 14, Nordstrom stock was up 1.4% on a year-to-date basis. However, the company’s weak holiday sales report is likely to drag the stock down.

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