Housing
|
Department store operator Nordstrom Inc (JWN.N) on Thursday followed Macy's Inc (M.N) in cutting its full-year forecast, bringing back into sharp focus concerns of a slowdown in the retail sector.
Shares of Nordstrom fell 20.5 percent to $50.46 in after-hours trading, their lowest since March 2013.
The company's results were in contrast to that of Kohl's Corp (KSS.N), which earlier in the day reported better-than-expected quarterly net sales and profit due to strong back-to-school sales.
The results had boosted shares of department store operators including J. C. Penney Co Inc (JCP), which reports third-quarter results on Friday.
Nordstrom did not specify a reason for disappointing results and cut in forecast.
But Carter Harrison, an analyst at research firm Conlumino, said "warmer weather during the quarter was extremely unhelpful to sales of fall and winter apparel".
Macy's on Wednesday cited warm weather, low spending by tourists and a pileup of unsold inventory for its lowered forecast.
A long spell of warm weather in September and October has hurt sales of cold weather apparel such as coats and jackets, hurting retailers.
Like Macy's, Nordstrom also saw inventories rise. Inventory increased 8 percent in the third quarter ended Oct. 31.
Macy's inventory was up 4.6 percent at the end of October.
Macy's, whose flagship Herald Square store covers an entire Manhattan block, said it would need to discount to clear fall season inventories.
Nordstrom cut its adjusted profit forecast for the year to $3.30-$3.40 per share from $3.85-$3.95.
The company also cut its sales growth forecast to 7.5-8.0 percent from 8.5-9.5 percent.
Same-store sales grew 0.9 percent in the three months ended October, way below the analysts' average estimate of 3.60 percent, according to Consensus Metrix.
New openings helped sales, but were affected by the poor performance of existing stores as indicated by the comparable numbers, Harrison said.
Revenue rose 6.5 percent to $3.24 billion.
Net income fell to $81 million, or 42 cents per share, from $142 million, or 73 cents per share, a year earlier.
Up to Thursday's close, the company's shares had fallen about 14 percent this year.
(Reporting by Subrat Patnaik in Bengaluru; Editing by Sriraj Kalluvila)