Nordstrom ditches co-presidency leadership structure following worse than expected financial performance in Q4

In its announcement on Tuesday, Nordstrom said that the co-presidency structure will no longer be in place as the American luxury department store chain announced Erik Nordstrom as the sole chief executive officer of the company.

The modification in Nordstrom’s leadership structure was revealed following worse than expected performance results on Tuesday that came short of the analysts’ estimates on both the earnings and revenue’s front. The poor quarterly financial results saw a significant decline of around 10% in its stock in extended trading on Tuesday.

At the time of writing, Nordstrom is exchanging hands at $31 per share in the stock market that marks just over 20% decline in 2020 so far. Its performance in 2019 was also reported similar with an annual loss of around 10% in the stock market.

Nordstrom’s Q4 Performance Results Versus Analysts’ Estimates

According to Refinitiv, analysts were expecting Nordstrom to print $4.56 billion in revenue in the fourth quarter. On the earnings front, their estimate was capped at $1.47 per share. In its performance report on Tuesday, the company revealed a dovish stance as it printed its quarterly revenue at a lower $4.54 billion while its EPS (earnings per share) was recorded at $1.42 in the recent quarter.

At $193 million, Nordstrom’s net income in the quarter that ended on 1^st February was also significantly lower than $248 million that was noted in the same quarter last year. The company’s total revenue in 2018’s Q4, however, was registered at a lower $4.48 billion.

Nordstrom also revealed a 1% increase in its full-price net sales in the fourth quarter while a greater 1.8% increase was recorded in off-price net sales. Contributing 35% to the company’s total quarterly sales, digital sales were seen 9% higher for Nordstrom in the recent quarter. In the fourth quarter last year, digital sales accounted for 33% of Nordstrom’s net sales.

Nordstrom’s Guidance For Fiscal 2020

In its guidance for fiscal 2020, Nordstrom said that it now expects a 1.5% to 2.5% growth in net sales. Its estimate for earnings per share this year was accentuated at $3.25 to $3.50. Analysts’ forecast for Nordstrom’s fiscal 2020 earnings is towards the upper end of its given range at $3.49 per share. According to Nordstrom, however, the given guidance currently doesn’t account for any potential impact of the Coronavirus emergency on its financial performance.

The company also said on Tuesday that it will no longer have 11 members on its board of directors. The membership will be confined to 10 directors only and will also have a limit of 10 years from now on.