Shares of retailer Nordstrom (JWN -1.64%) fell sharply at the open of trading on Wednesday, quickly losing 10% of their value. The company's first-quarter 2021 earnings, released after the market closed on Tuesday, was the causal factor.
First-quarter 2021 sales rose 44% from the year-ago period. Sales improved 7 percentage points sequentially from the fourth quarter of last year as well, showing continued improvement from the worst of the coronavirus shutdowns.
Online sales increased by 23%, to reach 46% of total sales. While all of that sounds great, 2020 was obviously an unusual year and investors were looking to see how Nordstrom performed relative to the first quarter of 2019. Unfortunately, looking back to the period before the pandemic, sales were off by 13%, showing that the department store is still struggling to remain relevant with consumers.
On the bottom line, Nordstrom reported an adjusted loss of $0.64 per share. Analysts had been looking for a loss of $0.53, so that was a sizable miss. Investors were let down by that, but also by the fact that peer Macy's (NYSE:M) managed to beat expectations just a couple of weeks ago. So not only did Nordstrom fall short on earnings, but it also looks like it's lagging behind the competition. No wonder investors were in a bad mood this morning.
Nordstrom is dealing with two headwinds at the same time. First is the consumer shift away from department stores. Second is the hit from the coronavirus. Although first-quarter earnings showed that progress is clearly being made on the second problem, the first one, which was an issue well before 2020, appears to be ongoing.