What: Following Nordstrom's (JWN -2.33%) third quarter earnings release after market close on Nov. 12, shares are down about 16% on Friday at the time of this writing.
So what: The sell-off is likely due to the high-end retailer's lower-than-expected earnings per share and comparable store sales growth.
Nordstrom reported earnings of $0.42 per share, or $0.57 when adjusted for $0.15 in transaction costs "associated with the closing of its credit card portfolio sale". This was well below average analyst expectations of $0.72. Same-store sales growth was also weak, increasing just 0.9% from the year-ago quarter. This growth meaningfully lags the company's year-to-date same-store sales growth of 3.5%.
Notably, the company's financial results were even below management's own expectations. They explained the worse-than-expected performance in its third quarter press release, saying it reflects "softer sales trends that were generally consistent across channels and merchandise categories".
Now what: Accounting for weaker consumer trends and its worse-than-expected third quarter, the company has reduced its full-year outlook for sales and earnings. Nordstrom now expects revenue growth and earnings per share in the range of 7.5% to 8% and $3.40 to $3.50, compared to prior expectations of 8.5% to 9.5% and $3.70 to $3.80, respectively.
