Nordstrom's weak 2024 forecasts overshadow strong holiday-quarter sales

Credit: REUTERS/Rick Wilking

Adds background in paragraph 7 and shares in paragraphs 1, 11

March 5 (Reuters) - Nordstrom JWN.N forecast annual results largely below analysts' estimates on Tuesday, signaling a slower-than-expected rebound in demand even as consumers see some relief from easing inflationary pressures, sending the company's shares down 10%.

The department store chain joins peer Macy's M.N in signaling weak 2024 sales as retailers brace for another year where spending on non-essential items such as apparel and household equipment is likely to remain pressured.

This comes at a time when U.S. prices picked up in January, but the annual increase in inflation was the smallest in nearly three years.

Nordstrom expects 2024 revenue to be between down 2% and up 1%, while analysts had expected an increase of 0.04%, according to LSEG data.

The company forecast annual profit per share in a range of $1.65 to $2.05, while analysts had expected $1.98.

Nordstrom's fourth-quarter total revenue of $4.42 billion beat estimates of $4.39 billion, mainly driven by strong demand for footwear and beauty products during the holiday season.

Customers are spending on running shoes by brands such as On, Hoka and New Balance as consumers increasingly look to dress casually and comfortably even for work.

Sales at Nordstrom's discount banner Rack rose 14.6%, while the company's eponymous label recorded a 3% drop in revenue.

The company has been working to bring in trendier products at its Rack stores in a bid to attract lower-income consumers who have been pressured by elevated costs of living. Nordstrom has also bet on increasing the number of Rack stores with 26 new openings planned for this year and spring 2025.

Excluding items, the company earned 96 cents per share in the fourth quarter, beating estimates of 88 cents, on easing supply costs and lower markdowns.

Nordstrom's shares were trading at $18.90 after the bell on the New York Stock Exchange.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Additional reporting by Kate Masters; Editing by Shounak Dasgupta)

((AnanyaMariam.Rajesh@thomsonreuters.com; Twitter: https://twitter.com/AnanyaMariam))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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