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March 3, 2023: Department store Nordstrom reported lower sales and profits for the holiday quarter, with net income falling to $119m from $200m a year earlier. However, earnings per share were 74 cents compared to the expected 66 cents. The company also announced that it would wind down its Canadian operations after it entered the country in 2014, with CEO Erik Nordstrom stating that “despite our best efforts, we do not see a realistic path to profitability for the Canadian business”. Nordstrom had previously cut its forecast, reporting a 3.5% drop in net sales for the nine-week period ending on 31 December.
For the new fiscal year, Nordstrom expects revenue to fall 4% to 6% with an EPS of 20 cents to 80 cents for the year. The company also factored in a more challenging economic backdrop and higher costs into its year-ahead forecast. Interim CFO Michael Maher said Nordstrom anticipated continuing inflationary pressure on its expenses, particularly labour and transportation costs, and the outlook included a 2.5 percentage point negative impact from the Canadian operation wind-down. The company plans to finish Canadian store closures by late June.
Activist investor Ryan Cohen bought a large stake in Nordstrom, causing the company’s stock to soar by over 19% this year. Cohen aims to push for change, including getting former Bed Bath & Beyond CEO Mark Tritton off Nordstrom’s board. Cohen bought, and later sold, a major stake in Bed Bath after criticising Tritton’s strategy and pushing for change at that company too. Nordstrom has also struggled with slower sales and more markdowns. It discounted merchandise more than expected in November and December to start the fiscal year with a healthier level of inventory.
