Nordstrom's Sales Show It Can't Sidestep Department-Store Gloom

Posted November 10, 2017

The department store posted Q3 sales of $3.5 billion, an improvement of 2 percent over the previous same-period, but just below forecasts for sales of $3.6 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.19 and $5.31 billion in revenue.

Shares of Nordstrom fell as much as 7.6 percent to $37 in late trading after the results were released. Net sales fell 6.1% year over year, due in part to store closures.

NEW YORK-Macy's Inc. reported that its third-quarter earnings more than doubled as it continues to cut costs. Specifically, earnings per share absorbed a 4 cents reduction while the estimated lost sales impact from the hurricanes was $20 million, or 60 basis points.

Tighter inventory controls enabled the group to boost profits margins, more than offsetting the drag from a decline in comparable same-store-sales. But the department store chain reported weaker-than-expected sales as it continues to have a hard time pulling in shoppers into its doors.

"A highlight of the third quarter was the launch of the new Star Rewards loyalty program - our best customers are responding positively", Gennette said. "Admittedly, total sales have been affected by the program of store closures, but the comparable number - which worsened since the last quarter - can not fall back on the same excuse".

Online sales aren't a problem for Macy's despite its brick-and-mortar struggles. He also said the company was encouraged by the potential of Backstage in Macy's stores, its in-store off-price format. The company touted a small comparable store sales increase, saying the traffic momentum it experienced in the first half of the year continued in the period.

Earnings: Net income in the quarter declined 20 percent to $117 million from $146 million a year ago.

CORRECTION: Nordstrom reported $3.63 billion in revenue for the quarter.

Kohl's - with 1,156 stores nationwide, including 116 in California - enjoyed "strong results" during the back-to-school season but a "soft" middle of the quarter "as we experienced disruptions from the hurricanes and other unseasonable weather", Kohl's CEO Kevin Mansell said in a statement.

"The business still has many structural issues to tackle as we embark on the next five years of our transformation, in the context of a very challenging retail and consumer environment".