Nordstrom Inc. (JWN - Get Report) shares fell Wednesday after the U.S. department store chain posted weaker-than-expected holiday sales, echoing similar struggles from rival retailers over an otherwise robust season for consumer spending.
Nordstrom said comparable sales for the three months ending on January 5 rose 0.3% from the same period last year, thanks in part to slower customer traffic, and but added that sales at its discount stores jumped 3.9%, thanks to an 18% surge in online transactions. Year-to-date sales at its full-price stores were below prior forecast, the company said, even as it raised the lower end of its full-year adjusted earnings guidance by 5 cents to $3.55 to $3.65 per share for its February 28 report.
"While year-to-date comparable sales of 2.1% were in-line with the Company's prior outlook of approximately 2% for fiscal 2018, Full-Price sales were below the Company's expectations," Nordstrom said in a statement released alongside the sales update. "As a result, the Company has incorporated in its annual expectations higher markdowns taken during holiday and to reposition inventory to a more appropriate level by the end of the year."
Nordstrom shares fell 4.8% to $45.01 by the close of trading on Wednesday.
Traditional U.S. retailers have posted uniformly weak sales over this holiday period, despite a robust backdrop for the American consumer, who is seeing wages rise at the fastest pace in a decade and domestic unemployment levels last seen in the late 1960s.
U.S retail sales rose by a stronger-than-expected 0.9% in November, the Commerce Department said last month, after an upwardly revised 0.7% increase in October, and data from Adobe Analytics suggests 2018 online holiday spending topped a record $126 billion.
However, both Macy's (M - Get Report) and Kohl's (KSS - Get Report) said sales over the Christmas period were weaker than anticipated, with the former cutting its earnings guidance by 15 cents, to between $3.95 and $4 a share, and vowing to "continue to take the necessary steps in January to ensure a clean inventory position as we enter fiscal 2019."
"While a weak holiday from bellwether Macy's may have seemed like a difficult leading indicator for retail, relatively solid trends across the rest of retail backdrop suggest the Macy's issues are more self-inflicted," wrote Credit Suisse analyst Michael Binetti, who cut his price target on the stock by $5 to $50 a share. "That said, the softer full-price traffic trends at Nordstrom leave us somewhat concerned about the high-income consumer amid recent S&P volatility."