* Kohl's, Nordstrom FY 2010 forecast disappoint analysts
* Kohl's shares off 5.8 pct
* Nordstrom off 2 pct after hours
By Phil Wahba
NEW YORK, May 13 Two top U.S. department store
operators on Thursday reported double-digit profit growth for
the first quarter but offered full-year forecasts that
suggested they have concerns about the strength of consumer
Kohl's Corp (KSS.N) and Nordstrom Inc (JWN.N), which serve
clienteles at different price points, have been among the
strongest performers in the retail sector and won market share
from rivals, and investor expectations have run high.
Kohl's, which operates mid-level stores, reported a
first-quarter profit that beat analyst estimates, but its top
executive said he preferred to be cautious when looking ahead.
"We don't want to get ahead of ourselves," Kohl's Chief
Executive Kevin Mansell told analysts. [ID:nN13258880]
"Demand in the categories in which we operate is flat or
down over the last couple of years. Therefore, the successful
retailers are going to have take business from others," Mansell
later told Reuters in an interview.
The company raised its fiscal 2010 outlook to $3.57 to
$3.75 a share from a prior view of $3.40 to $3.63 a share, but
that fell short of the $3.77 a share expected by Wall Street.
Upscale retailer Nordstrom Inc reported a 43 percent
increase in earnings but missed first-quarter Wall Street
forecasts, hobbled by high selling and administrative costs,
including those related to new store openings and commissions
for sales staff. [ID:nN13189879]
Nordstrom raised its fiscal full-year profit forecast to a
range of $2.50 to $2.65 per share, from $2.35 to $2.55. The
midpoint of that range is below the $2.61 per share estimated
by Wall Street analysts. [ID:nN13189879]
After Nordstrom last week reported a 12 percent sales surge
during the quarter at its stores open at least a year, Wall
Street was hoping for more, an analyst said.
"There could have been a bolder increase," said Manning &
Napier analyst Walter Stackow. His firm holds Kohl's and
In a sign that conservative forecasts may be justified,
Kohl's and Nordstrom said that shoppers' average amount spent
per transaction was down in the quarter, a trend Macy's Inc
(M.N) also noted when it reported results on Wednesday.
Kohl's and Nordstrom suffered from bad timing. Their
forecasts came on a day when Wall Street was particularly
anxious about retail and sold off stocks in the sector.
The S&P Retail Index .RLX was down 3 percent on Thursday.
Macy's Inc and JC Penney Co Inc (JCP.N) each fell about 5
percent, while Kohl's was down 5.8 percent.
Nordstrom was down 2 percent in after-hours trading, in
addition to a 4 percent drop during normal trading.
(Reporting by Phil Wahba; Editing by Steve Orlofsky)