JWN stock tanked this morning after the luxury apparel retailer Nordstrom Inc’s (NYSE:JWN) financial performance in the fourth quarter proved to be a disappointment. On top of that, the retailer’s profit projection for 2020 was also below expectations, and that was another factor as to why the stock sank by as much as 5% on Tuesday.
Earnings Miss Estimates
The company added that it is going to do away with the co-president system and have Erik Nordstrom as the only Chief Executive Officer. The company’s net earnings for the quarter that ended on February 1 dropped to $193 million, which worked out to earnings of $1.23 per share.
In the prior-year period, the company generated net earnings of $248 million and earnings per share of $1.48 per share. Adjusted earnings per share stood at $1.42 per share, which fell short of analysts’ estimates of $1.47 per share. Nordstrom stated that it had incurred higher costs in order to further expand its loyalty program, and in addition to that, it also had to contend with the higher costs for occupying its flagship store in New York City.
JWN stock is now down by 4.90% at $31.82.
Revenue rose from $4.48 billion to $4.54 billion. Analysts had expected revenue of $4.56 billion.
In the conference call, Nordstrom executives stated that the company made key investments in its loyalty program and is looking to offer a much more varied array of apparel. In the fiscal year 2020, Nordstrom expects to generate earnings between $3.25 per share and $3.50 per share.
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That is short of analysts’ expectations of $3.49 per share. The company added that the projections have not taken into account any impact that might be suffered by Nordstrom from the coronavirus outbreak. Department stores like Nordstrom are highly dependent on tourists and high footfalls to ensure higher sales numbers.
JWN stock has tumbled over 20% so far this year.
Featured image: DepositPhotos © Banoart
