Nordstrom first-quarter profit falls 2.7%

Nordstrom

Upscale department store retailer Nordstrom has reported a 2.7% drop in first-quarter net profit, with higher costs and unseasonable weather weighing on sales of its spring merchandise.

Net earnings were $145 million for the three months to May 4, compared to $149 million in the same quarter last year. While sales rose 4.8% to $2.7 billion from $2.5 billion last year, and same-store sales climbed 2.7%, the company said sales volume was lower than planned.

Gross margin declined 50 basis points to 37.1% against 37.6% the prior year, partially due to higher costs related to the expansion of its Nordstrom Rack stores.

The Seattle-based company said its first-quarter performance was “consistent” with the lower end of its expectations. Although it experienced soft sales trends in seasonal merchandise and geographically in the Northeast, Mid-Atlantic and Midwest regions during the first two months of the quarter, overall sales improved in April. 

Looking forward, Nordstrom continues to expect annual earnings to be $3.65-3.80 per share and same-store sales to increase 3-5%.

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