(Reuters) - Upscale department store operator Nordstrom Inc’s (JWN.N) shares dropped more than 7 percent on Thursday after the retailer reported same-store sales that missed analysts’ estimates including a weak quarter for its shoe business.
Same-stores sales rose 0.6 percent in the first quarter, missing analysts’ average estimate of a rise of 1.13 percent, according to Thomson Reuters I/B/E/S.
“While their full-price stores are the most modern out of the department store sector, we believe they have not implemented their merchandising strategies across their store fleet to increase the business and Rack is a wild card,” according to a note by retail investment firm Jane Hali & Associates LLC that referred to the chain’s outlet division, Nordstrom Rack.
Same-store sales were up 0.7 percent at its high-end department stores and up 0.4 percent at its discount Rack stores.
Executives of the Seattle-based company said shoe sales were “challenged” in the first quarter and weather hurt some of its seasonal sales in women’s apparel but that they remain optimistic.
“We still have a lot of great foot traffic, and we have a real opportunity if we get the mix and the buy right,” Co-President Peter Nordstrom reassured analysts on a conference call, highlighting men’s apparel, accessories and beauty as being some of the company’s best-performing categories.
The retailer, which opened its first men’s-only store in New York City last month, ended discussions in March with its founding family over taking the company private after failing to agree on an acceptable price.
The company’s previous going-private plans came against the backdrop of the brick-and-mortar retail sector facing record store closures, as more shoppers abandon malls and department stores in favor of buying online.
“Bad retailers will continue to close, so legacy brands need to remain focused on earning every single shopper,” said Bob Phibbs, a brand specialist and chief executive of the Retail Doctor consulting firm.
Nordstrom’s miss comes on the same day as rival JC Penny’s (JCP.N) also posted comparable store-sales that fell short of analysts’ estimates.
Department chain Macy’s, on the other hand, crushed analysts’ expectations on Wednesday, with shares rising up to 13 percent, and raised its full-year forecast.
Nordstrom’s net income rose to $87 million, or 51 cents per share, in the quarter ended May 5, from $63 million, or 37 cents per share, a year earlier.
Nordstrom’s total revenue increased 6.2 percent to $3.56 billion, beating estimates of $3.46 billion.
Excluding items, the company earned 51 cents per share, according to Thomson Reuters I/B/E/S, beating estimates of 43 cents per share.
Reporting by Vibhuti Sharma in Bengaluru and Melissa Fares in New York; editing by Cynthia Osterman and Lisa Shumaker