Nordstrom Slides After Soft 2020 Earnings Forecast, Q4 Sales Miss

Seattle-based Nordstrom said it continues to monitor coronavirus developments, and will be "flexible and agile in adjusting our inventory, expense, and capital allocation plans accordingly".
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Nordstrom Inc.  (JWN) - Get Report shares slipped lower Wednesday after the upscale retailer forecast disappointing 2020 earnings and said holiday quarter sales fell shy of Wall Street forecasts.

Nordstrom said adjusted earnings for the three months ending in January, the company's fiscal fourth quarter, were pegged at $1.42 per share, down 4% from last year and 5 cents shy of the Street consensus forecast. Net sales for the quarter also missed estimates, and were essentially flat to last year at $4.44 billion as revenues were squeezed by online giants such as Amazon  (AMZN) - Get Report and discount rivals such as Burlington  (BURL) - Get Report

Looking into the coming financial year, Nordstrom said it sees adjusted earnings in the range of $3.25 to $3.50 per share, compared to a Refinitiv forecast of $3.49, but noted its forecast doesn't include any projected impact from the ongoing coronavirus crisis.

"We're monitoring this fluid situation closely, with the well-being of our customers and employees as the top priority," Nordstrom told investors on a conference call late Tuesday. "We have a team focused on monitoring, planning for and responding to any potential impacts the virus may cause to our business. We're assessing potential implications for both traffic and supply chain." 

"Our private label business makes up around 10% of sales, with less than 30% sourced from China," Nordstrom added. "We are communicating with our vendors and brand partners as it relates to merchandise deliveries. We're looking at this on a case-by-case basis and planning accordingly."

Nordstrom shares were marked 1.8% lower in early Wednesday trading to change hands at $32.78 each, a move that would trim the stock's six-month gain to around 11%. 

"Looking ahead, initial 2020 EPS guide  is near the Street’s $3.50 — likely no worse than what’s embedded in the stock given a significant stock pullback lately (-19% last week)," said Credit Suisse analyst Michael Binetti. "But we’re increasingly discouraged at how far behind Nordsrom is behind on the targets two years in to its five-year plan."