Shares of Nordstrom, Inc. (NYSE:JWN) were swept up in the retail sell-off today as department-store stocks and other brick-and-mortar retailers fell sharply. The stock closed down 5.3%.
Along with Nordstrom, J.C. Penney stock was down 6.7%, while Kohl's lost 4%. A pair of analyst downgrades on Victoria's Secret parent L Brands and Urban Outfitters seemed to spark the sell-off. Elsewhere, Staples said it would seek a buyer, a reflection of its own inability to turn around its business, and Amazon.com shares topped $900 for the first time ever, hitting another record high. Ralph Lauren also said it would cut jobs.
Retailers including L Brands, Gap, and Costco Wholesale are expected to report comparable sales for March later this week, which could also move the sector.
Nordstrom has fared better than its department-store peers, as the company has found some success in its off-price Nordstrom Rack brand and in online sales. However, comparable sales at its full-line stores continue to fall.
There's no question that department stores are under pressure as mall traffic falls and e-commerce options continue to get better. The long-term picture for the department-store sector does not look promising. Still, Nordstrom has not been forced into massive store closings the way J.C. Penney and Macy's have, and since Nordstrom has only 123 stores, its brand isn't nearly as saturated.
Management projected earnings per share of $2.75 to $3.00, down modestly from $3.14 last year. While I wouldn't lose hope in the stock just yet, investors shouldn't be surprised to see more days like today.