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(Reuters) – Nordstrom Inc. on Tuesday lowered its forecast of revenue and earnings after announcing weaker-than-expected first-quarter results, hurt by the launch of a new loyalty program and by the lower sales of women's clothing at normal prices.
The actions of the department store operator have accumulated more than 9% of losses in post-trade exchanges.
The Seattle-based retailer, who sells everything from clothing and footwear to interior design, has seen sales of its full-price, non-price businesses plummet online and in stores due to the unsuccessful launch of its loyalty program "Nordy Club". , reduced digital marketing and products that did not meet buyers as the company wanted.
Co-President Erik Nordstrom said during a post-profit conference call that the company had stopped sending "ratings" of rewards to its mail loyalty program customers in order to put the program in place. line and reach customers faster. This change has reduced pedestrian traffic in all of its stores, said the manager, because many customers rely on these awards by mail.
"We are making the changes we deem necessary to improve our business as we continue to focus on spending," said Nordstrom.
Even so, analysts have remained worried.
"While we can expect, at least in part, challenges for the full-range sector, the deterioration of the non-price division is more worrisome," said Neil Saunders, general manager. GlobalData Retail.
The company also stated that the fourth quarter trends were continuing in the first quarter and that it needed to increase its promotions to eliminate excess inventory from its winter collection.
Nordstrom, along with other traditional retailers, has struggled to respond to consumers who are pointing to fast fashion brands and online sites such as Amazon. .com, rather than going to shopping malls.
Nordstrom has invested heavily in its Nordstrom Rack stores, which sell non-price products in the United States and Canada. Its local Nordstrom stores are also a source of pride, where buyers can consult personal stylists for fashion, change their clothes, etc.
The company, which was about to open its first women's store in New York in October, is now expecting a net business figure for 2019 between 2% and 2%, while He had already forecast a rise of 1% to 2%.
The company expects earnings in 2019 of between $ 3.25 per share and $ 3.65 per share, compared to an earlier forecast of $ 3.65 per share at $ 3.90 per share.
Total revenue for the first quarter, ended May 4, decreased 3.3% to $ 3.44 billion, which is below analysts' estimates of $ 3.58 billion. IBES Refinitiv data.
Nordstrom gained 23 cents a share in the quarter, down 20 cents from analysts' estimates.
Earlier Tuesday, JC Penney Co Inc.'s sales at the comparable store dropped more than expected in the first quarter and its net loss almost doubled after the retailer ceased its appliance and in-store furniture business, thereby reducing its shares by 10%.
Kohl's Corp. announced Tuesday a reduction in its earnings guidance for the year, after missing its estimates of same-store sales and quarterly profits, resulting in a 11% decline in shares.
Last week, rival Macy's Inc. surpassed Wall Street's estimates for quarterly same store sales and profits from increased online sales and increased demand for items sold in its non-price stores.
(Report by Nivedita Balu to Bengaluru and Melissa Fares in New York, edited by Shailesh Kuber and Chris Reese)
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