Investing.com -- Nordstrom Inc (NYSE:JWN) became the latest in the line of major retail firms to miss quarterly sales and earnings expectations on Thursday, exacerbating concerns among brick-and-mortar department store of an acceleration in the industry's rapid demise.
For the first quarter of Fiscal Year 2016, Norstrom reported earnings of $46 million or 0.26 per share, down sharply from net profits of $128 million or 0.66 per share over the same period in 2015. At the same time, Nordstrom increased its revenue 1% to $3.25 billion, due primarily to the sale of its credit card business in October. While Nordstrom's net sales rose by 2.5% for the three-month period ending on April 30, the company's comparable-store sales tumbled 1.7% on the quarter.
Analysts expected revenue of $3.28 billion on per share earnings of 0.46.
"Our first quarter results were impacted by lower than expected sales. In response we have made further adjustments to our inventory and expense plans," said Blake Nordstrom, co-president, Nordstrom, Inc. "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."
In addition, Nordstrom's Retail EBIT fell by $107 million year over year, a reflection the company attributed to increased markdowns and higher credit chargeback expenses. Nordstrom also said its Credit EBIT declined by $32 million relating to an expected reduction from its revenue sharing program agreement with TD Bank last October.
Earlier this week, shares in both Macy’s Inc (NYSE:M) and Kohl’s Corporation (NYSE:KSS) fell sharply after the retailers failed to meet analysts' expectations, leading to further declines in the SPDR Retail Sector ETF. The downbeat results provide a foreboding harbinger for JC Penney Company Inc Holding (NYSE:JCP) on Friday when the struggling department store release its first quarter earnings. JC Penney is expected to report revenues of $2.92 billion on net losses of 0.38 per share.
Shares in Nordstrom, meanwhile, tumbled on Thursday evening after the company lowered its full-year profit and same-store sales outlook. Nordstrom shares fell 8.00 or 17.70% to 37.20 in after-hours trading to hit a fresh 52-week low.