Nordstrom (JWN) reports results for Q2 2022

Shoppers leave a Nordstrom store on May 26, 2021 in Chicago, Illinois.

Scott Olson | Getty Images News | Getty Images

Nordstrom on Tuesday cut its full-year financial forecast as the department store chain faces a glut of inventory and slowing demand.

The retailer̵[ads1]7;s reduced forecast came even as it reported second-quarter earnings and sales ahead of analysts’ estimates. Shares fell 13% in extended trading. Earlier in the day, Macy’s also cut its full-year outlook, saying it expects weakened consumer spending on discretionary items such as apparel will force it to take heavy markdowns to move items off shelves.

“Customer traffic and demand slowed significantly from late June, primarily at Nordstrom Rack,” CEO Erik Nordstrom said in a press release. “We are adjusting our plans and taking actions to navigate these dynamics in the short term, including aligning inventory and expenses with recent trends.”

Nordstrom now sees annual sales, including credit card revenue, up 5% to 7%, compared to a previous range calling for a 6% to 8% increase. It calls for adjusted earnings per share to be in the range of $2.30 to $2.60, down from a previous forecast of $3.20 to $3.50.

Here’s how Nordstrom did in its fiscal second quarter compared to what analysts expected, based on Refinitiv estimates:

  • Earnings per share: 81 cents adjusted vs. 80 cents expected
  • Revenue: $4.1 billion vs. $3.97 billion expected

Nordstrom’s net income in the three-month period ended July 30 grew to $126 million, or 77 cents a share, from $80 million, or 49 cents a share, a year earlier.

Sales rose to $4.10 billion from $3.66 billion.

Stock levels increased by almost 10% compared to the same period last year.

This story is in development. Please check back for updates.

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