Investing.com - Shares of department-store chain Nordstrom (NYSE:JWN) fell nearly 9% postmarket after the company missed on earnings and revenue for the fiscal first quarter. Nordstrom cut its guidance as well.
Nordstrom had expected to earn $3.65 to $3.90 a share for the year. The new guidance is $3.25 to $3.65. Revenue growth is projected at down 2% to flat. The prior guidance had been up 1% to 2%.
For the quarter, Nordstrom earned 23 cents a share, missing the estimate of analysts polled by Investing.com of 43 cents. Revenue was $3.44 billion, off 3.3% from a year ago. The Investing.com estimate was $3.57 billion.
The company said its biggest problem was a 5.1% decline in sales of full-price merchandise. Digital sales jumped 7% year over year. The company also said it struggled with a number of execution issues, including a big one with its enhanced loyalty program.
Nordstrom shares were up 1.12% to $37.89 in regular trading. But they're down 18.8% this year based on the Tuesday close. They hit a 52-week low of $36.37 on Friday. That's off 44.2% from a 52-week high of $67.75 reached in early November. If the market reaction to the earnings report holds on Wednesday, the shares could hit a new 52-week low and reach levels not seen since 2011. The consensus target on the stock is $46.94, but analysts will likely cut their targets in the next few days.
Like many old-line department store chains, Nordstrom has been battered by the rise of digital shopping. It has invested millions in making shopping easy on its website and has results to show for it. Not only did digital sales rise 7% year ove year, but it now represents 31% of total sales, up from 28% a year ago.
Nordstrom defines its digital business as "online sales and digitally assisted store sales which include Buy Online, Pick Up in Store ('BOPUS'), Ship to Store and Style Board, a digital selling tool."
But the traditional full-price business is suffering badly and even its widely-admired off-rack business didn't have a strong quarter, with sales off 0.6%. Its gross profit margin fell to 33.5% in the quarter, down from 34.1% a year ago.
Nonetheless, the company was able to buy back 4.1 million shares for about $186 million. Its profit margin for earnings before interest and income taxes fell to 2.4% from 4.4%.
Nordstrom still plans to open what it calls its flagship store, a seven-story, 320,000-square operation, on West 57th Street in New York City on Oct. 24..