Nordstrom’s stock fell after it announced mixed numbers for initial sales for the holiday season, and the company said on Wednesday that its net sales fell by 22% year on year during the nine-week holiday period that ended on January 2, in line with the company and analysts’ expectations.
What scared investors was the company’s release of its EBIT margins, and Nordstrom said the number would fall by five percentage points, while Wall Street saw a drop of just over 3 percentage points.
This led to a decline in the company’s shares by 4.2% to reach $36 in early trading, and expectations indicate a decrease in profit margins before interest and taxes to less than 2%, compared to 7% during the same period last year. The company blames lower sales, shipping fees and higher wages for its stock’s decline.
However, there were points of optimism in what the company announced, as it stated that sales improved gradually during the months of November and December, and continued at this pace until this month.
Online sales are up 23% and now account for more than half of total sales, up from just over a third a year ago, and more than 30% of in-store orders are delivered directly to customers this represents another positive aspect given the increasing shipping costs and customers’ desire for flexible delivery options.
And most Nordstrom news analysts believe its sales should improve regularly as its merchandise is geared for post-pandemic and store reopening.