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Nordstrom Plunges 8% as Sales Fall Below 2019-Levels

Stock MarketsAug 25, 2021 05:52
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© Reuters.

By Dhirendra Tripathi

Investing.com -- Nordstrom stock (NYSE:JWN) slumped more than 8% in Wednesday’s premarket trading as a 6% decline in the company’s second-quarter sales from 2019 weighed.

The fact that sales doubled from a year ago and that the company raised its annual revenue guidance was offset by the sales slump.

The company attributed the drop in sales, relative to 2019, to the timing shift of the annual anniversary sale, with roughly one week falling into the third quarter of 2021. This had a negative impact of approximately 200 basis points on net sales compared with 2019, the company said.

Sales from the annual anniversary sale rose 1% from levels seen before the pandemic two years ago.

For the record, Macy’s (NYSE:M) and Kohl's (NYSE:KSS) faced no such hiccups.

"(Nordstrom) straddled the two quarters with the sale because without it, they would have been in deeper trouble come the third quarter," Jane Hali, chief executive officer of Jane Hali & Associates, told Reuters.

Sales growth only during the event shows Nordstrom can only do business when there is a sale, Hali told the news agency.

Compared to the end of 2019 second quarter, Nordstrom closed the recent quarter with higher inventories, which it again attributed to the anniversary time shift, and also to its efforts to mitigate continuing supply chain backlogs and support improving sales trends.

For the second quarter ended July 31, net sales increased 101% year-on-year to $3.56 billion. Adjusted earnings per share on a diluted basis came in at 49 cents compared to a loss of $1.62 in the second quarter a year ago.

Nordstrom expects current year revenue to rise more than 35%, compared with an over 25% forecast earlier.

Nordstrom Plunges 8% as Sales Fall Below 2019-Levels
 

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