Deeper promotions lower Nordstrom holiday quarter profit
(Reuters) - Nordstrom Inc (JWN.N) on Thursday reported a lower profit for the holiday quarter, hit by higher-than-expected markdowns, and the high-end retailer gave a full-year profit forecast that missed Wall Street expectations.
The upscale department store operator reported that comparable sales rose 2.6 percent and overall revenue grew 0.4 percent to $3.7 billion.
Like so many retailers during a bruising holiday season, Nordstrom ended up having to offer bigger deals to win customers, hurting sales and eating into its profit margin. Its gross margin fell 0.55 percentage point.
Nordstrom also said it expects its gross margin to slip this year.
Sales at full-line Nordstrom stores open at least a year fell 3.3 percent during the quarter. But bargain-hunting by holiday shoppers helped Nordstrom, lifting same-store sales at its Rack discount chain. Another bright spot was its online sales, which rose 30 percent.
Nordstrom, which also operates the Rack chain of low-priced stores, said net income for the fiscal fourth quarter ended February 1 fell to $268 million, or $1.37 a share, from $284 million, or $1.40 per share a year earlier.
For the new fiscal year, Nordstrom forecast a profit of $3.75 to $3.90 per share, below the $4.05 analysts had been expecting, according to Thomson Reuters I/B/E/S. The retailer expects same-store sales to rise 2 to 4 percent.
Nordstrom, which is opening its first international stores in Canada this year, said its pre-opening costs would lower its profit.
(Reporting by Phil Wahba in New York; Editing by Phil Berlowitz)