Nordstrom Inc. (JWN) 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) and Kohl's (KSS) 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."