Shares of Nordstrom (JWN +0.00%) fell 16.1% on Wednesday after the department-store chain announced better-than-expected quarterly results but followed with underwhelming forward guidance.
NYSE: JWN
Key Data Points
Nordstrom's solid end to fiscal 2023
For its fiscal fourth quarter ended Feb. 3, 2024, Nordstrom's net sales grew 2.2% year over year to $4.293 billion, translating to adjusted (non-GAAP) net income of $0.96 per share. Most analysts were only modeling earnings of $0.89 per share on revenue closer to $4.38 billion.
Management noted the company's active, beauty, and women's apparel segments had the strongest growth during the quarter on a year-over-year basis. Growth was particularly strong at Nordstrom Rack, the company's off-price brand, where net sales increased 14.6% year over year (or 8.8% excluding an extra week in the quarter, compared to the same year-ago period).
"We're laser-focused on efforts we know will drive growth and profitability across the business over the next few years, including new Rack store openings, Nordstrom digital growth and increasing comp-store sales," added Nordstrom CEO Erik Nordstrom.
What's next for Nordstrom investors?
Looking ahead to fiscal 2024, the company issued guidance for revenue ranging from a 2% decline to 1% growth over 2023 (including a roughly 135-basis-point headwind from an extra week last fiscal year), assuming comparable-store sales range from a 1% decline to growth of 2%. On the bottom line, that should translate to earnings per share of $1.65 to $2.05 -- or $1.85 per share at the midpoint. By comparison, most analysts were expecting higher fiscal year 2024 earnings of $1.98 per share, but on a 0.4% revenue decline.
That guidance arguably wasn't as bad as today's share-price decline might indicate. But the quarter also didn't give bullish investors much reason to cheer. Viewed through that lens, it's hard to blame some investors for taking their money and putting it to work in other promising stocks.
