Nordstrom out of fashion after third quarter results, shares sink

Investors marketed down shares in Nordstrom on Friday after the company missed analysts’ earnings estimates by a wide margin and lowered its guidance for the full year.

The US fashion retailer reported a 43% drop in net earnings to $81m for the quarter ending on 31 October, yielding earnings per share of 42 cents.

That included a 15 cent charge associated mainly with the sale of its credit card portfolio. The unit was hived off to TD Bank USA for $2.2bn, the lion’s share of which – $1.8bn – was earmarked for return to shareholders.

On 27 October the luxury fashion store chain paid out a special cash dividend of $900m, amounting to $4.85 per share.

Total revenues rose 6.6% to $3.2bn

“Sales were softer across channels and merchandise categories,” management said in a statement.

Analysts on Wall Street had pencilled in EPS of 72 cents on $3.37bn in revenues.

In like-for-like terms, its sales edged higher by 0.9% versus the comparable period of a year ago. Its wares flew off the hangers at its off-price segment, with net sales up 12%.

The company led by Blake Nordstrom lowered its guidance for full-year comparable sales growth to between 2.5% to 3.0%, down from a previous projection for between 3.5% to 4.5%.

As a result, full year EPS was seen coming in at between $3.30 to $3.40, versus a prior view of $3.85 to $3.95.

By 14:27 shares in NYSE-listed Nordstrom were 20.47% lower to $50.48.