Nordstrom (JWN) reported earnings Thur 12 May 16 (a/h)

** charts before earnings **

 

** charts after earnings **

 

Nordstrom misses by $0.09, misses on revs; lowers FY17 guidance :

• Reports Q1 (Apr) earnings of $0.36 per share, excluding $0.10 in charges, $0.09 worse than the Capital IQ Consensus of $0.45; revenues rose 2.5% year/year to $3.19 bln vs the $3.23 bln Capital IQ Consensus. 
• First quarter earnings were below the Company's expectations, primarily driven by lower than planned sales and higher markdowns to better align inventory to current trends. 
• Comps decreased 1.7% vs. +0.2% ests.
• Full-price net sales, which consist of U.S. full-line stores and Nordstrom.com, combined with Canada and Trunk Club, decreased 2.2% and comparable sales decreased 4.3%. Across U.S. full-line stores and Nordstrom.com, the top-performing merchandise category was Beauty. The younger customer-focused departments in Women's Apparel continued to reflect strength with positive comparable sales increases. The Midwest was the top-performing full-price geographic region.
• Off-price net sales, which consist of Nordstrom Rack stores and Nordstromrack.com/HauteLook, increased 11.8% and comparable sales increased 4.6%. The East was the top-performing off-price geographic region.
• Gross margin of 34.2% decreased 164 basis points YoY primarily due to higher markdowns to better align inventory to current trends.
• While sales trends were below expectations, we ended the period with inventory growth of 5.4% and net sales growth of 2.5% resulting in a negative spread of 3%, which represents an improvement over the negative spread of 7% in the fourth quarter of 2015.
• Co issues downside guidance for FY17, lowers EPS to $2.50-2.70 from $3.10-3.35 vs. $3.20 Capital IQ Consensus; lowers FY17 revs to +2.5-4.5% to ~$14.45-14.73 bln (from +3.5-5.5%) vs. $14.74 bln Capital IQ Consensus; lowers comps to -1% to +1% from +0-2%.
• The Anniversary Sale shift into Q3 will impact comps 200bps in Q2 and +250 bps in Q3.