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%.
For more fashion and apparel industry news, go to just-style.com