Nordstrom shares tank 25% in extended trading: explained here

Nordstrom Inc (NYSE: JWN) reported better-than-expected sales for its fiscal third quarter on Tuesday. Shares, however, tanked more than 20% in after-hours trading as earnings fell shy of estimates. In the press release, CEO Erik Nordstrom said:

Q3 financial performance

Nordstrom’s Q3 earnings printed at $64 million that translates to 39 cents per share. In the same quarter last year, its net income was capped at $53 million or 34 cents per share. The U.S. retailer noted an annualised growth of 18% in sales to $3.6 billion.

According to FactSet, experts had forecast 57 cents of EPS on $3.5 billion in sales. Compared to the 2019 equivalent, sales were still down about 1.0% in the recent quarter.

What else was noteworthy

Nordstrom’s sales in the third quarter saw a boost worth 200 basis points from its anniversary sale. CEO Erik Nordstrom also said:

The retailer’s namesake brand registered an 11% increase in net sales, while Nordstrom Rack was up 35% from last year. The American luxury department store chain noted a 12% annualised growth in digital sales and its ending inventory was up 13% from 2019.

Future guidance

For the full financial year, Nordstrom forecasts a minimum of 35% YoY growth in revenue. It expects EBIT margin to come in at 3.0% to 3.5% of sales.

The Washington-based company concluded the quarter with $867 million in available liquidity. Including the price action in extended trading, JWN is now in the red on a year-to-date basis.