Why Nordstrom stock fell today

stock nordstrom (J.W.N. -16.08%) Shares fell 16.1% on Wednesday after the department store chain reported better-than-expected quarterly results but issued a disappointing outlook.

Nordstrom finishes strong in fiscal 2023

For the fiscal fourth quarter ended February 3, 2024, Nordstrom’s net sales increased 2.2% year-over-year to $4.293 billion, translating to adjusted (non-GAAP) net income of $0.96 per share. Most analysts were modeling earnings of just $0.89 per share on revenue of closer to $4.38 billion.

Management said the company’s active, beauty and women’s apparel segments recorded the strongest growth during the quarter compared to the same period last year. Growth was particularly notable for the company’s discount brand, Nordstrom Rack. Net sales increased 14.6% year-over-year (or 8.8% excluding the additional week-over-year quarter).

“We are focused on efforts to drive growth and profitability across our business over the next few years, including opening new Rack stores, growing Nordstrom digital, and increasing Compressor store sales,” added Nordstrom CEO Erik Nordstrom. Yes.

What’s next for Nordstrom investors?

Looking ahead to fiscal 2024, the company announced revenue guidance ranging from a 2% decline to 1% growth compared to 2023 (including one additional week of headwinds from last fiscal year). From 1% decline to 2% growth. Bottom line, this should translate to earnings per share of $1.65 to $2.05, or $1.85 per share at the midpoint. By comparison, most analysts expected fiscal 2024 earnings to rise to $1.98 per share, but revenue would decline 0.4%.

That guidance may not have been as bad as today’s stock price drop suggests. But this quarter gave optimistic investors little reason to cheer. From that perspective, it’s hard to blame some investors for taking their money and investing it in other promising stocks.