On Thursday, Nordstrom Inc slashed its financial projection for the rest of the year after a first quarter that produced results that were worse than had been expected, as the retailer announced it needed larger discounts to clear out inventory.
The quarterly numbers are only the latest sign of the woes amongst retailers that are mall-based. Over the last few days Macy’s reported its worst sales for a quarter since the 2008 recession and Kohl’s posted a drop of 87% in profit as well as a decline that was unexpected in sales.
Nordstrom shares, which are down more than 41% over the last 12 months, fell another 17% in trading after hours on Thursday. Earlier on Thursday, shares set a new low of 52-weeks prior to closing.
The retailer has struggled to revamp its sales at its stores that are full price. It reported less profit in five of its last six quarter, including the most recent three quarters.
The co-president of the company Blake Nordstrom said the results for the first quarter had been hurt by sales that were lower than had been expected. He added that as a result of that the company made more adjustments to its plans of inventory and expenses.
Amongst other actions, Nordstrom said it was planning to launch a bigger loyalty program with a target of adding 5 million clients.
For the full year, the retailer, based in Seattle, projects a per share profit of between $2.50 and $2.70, with sales growing by between 2.5% and 4.5%, compared to its forecast earlier of between $3.10 and $3.35 per share earnings and sales growth of between $3.5 % and 5.5%.
The retailer is projecting now that its comparable sales, which are sales from stores, open a minimum of one year and its online sales will range between a drop of 1% and an increase of 1%, down from a prior forecast of between flat and an increase of 2%.
Overall, sales during the quarter, which ended on April 30, were up 2.5% from the same period last year, while sales at comparable stores dropped by 1.7%. Analysts were projecting an increase of 0.1% in comparable sales.
However, sales at Nordstrom’s stores that are full price, which represent the majority of sales, dropped by 2.25, with comparable sales for those same stores dropping a disappointing 4.3%.
At the same time, sales at its discount stores HauteLook and Nordstrom Rack were up close to 12%, with an improvement of 4.6% in comparable sales.
Overall, profit for Nordstrom was $46 million equal to 26 cents per share in comparison to last year during the same quarter of $128 million equal to 66 cents per share.