Nordstrom stock was falling in after hours trading Tuesday even though the retailer’s July quarter results beat expectations and it raised its full-year outlook. Macy’s may have set the bar too high with strong earnings.
Shares of Nordstrom dropped 7.4% to $35.01 in extended trading Tuesday. The stock had rallied 21% in 2021 and 143% from a year ago.
Even at $35, Nordstrom stock is still well above its $32.61 close from Wednesday, Aug. 18. Shares had rallied in recent days following upbeat results from Macy’s (M) and Kohl’s (KSS). Those reports seemed to signal bricks-and-mortars retailers were faring better than expected. Such gains may have set the bar for Nordstrom so high that even better-than-expected top and bottom line figures, and a higher outlook was a dissapointment.
Nordstrom (ticker: JWN) reported fiscal second-quarter earnings of 49 cents a share, ahead of consensus estimates at 27 cents a share, according to FactSet. Sales of $3.57 billion were up 101% from last year and above consensus estimates at $3.34 billion. Still, sales were down 6% from the same period in 2019, before the pandemic withered traffic counts in department stores.
“Our second-quarter results demonstrate the strength of our two brands, the power of our ‘closer to you’ strategy and the success of our iconic Anniversary Sale,” CEO Erik Nordstrom said in the earnings release. “We capitalized on improving customer demand with focused execution, healthy inventory sell-through and continued expense management to deliver strong quarterly results.”
The company said freight and labor cost pressures led to selling, general, and administrative expenses as a percentage of net sales that were 1.7 percentage points higher than in 2019.
Nordstrom did raise its full-year outlook. It expects revenue growth, including retail sales and credit card revenues, of more than 35%, up from a prior expectation for more than 25% growth.
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