What: Shares of department store Nordstrom (JWN -2.02%) slumped on Friday after the company reported its fourth-quarter results, missing analyst estimates for both revenue and earnings. At 11:45 a.m. EST Friday, the stock was down about 6.5%, after being down as much as 11.5% earlier in the day.

So what: Nordstrom reported quarterly revenue of $4.19 billion, up 3.7% year over year, but about $20 million shy of the average analyst estimate. Comparable sales rose by just 1%, with full-price comparable sales growing by 0.2%, and off-price comparable sales rising by 3.6%. Both of these numbers include online sales through Nordstrom.com and Nordstromrack.com, which grew by 11% and 50% respectively.

Nordstrom reported adjusted EPS of $1.17, which excludes a $0.17 asset impairment charge, $0.05 below analyst expectations. Gross margin declined by 92 basis points year over year, driven by increased markdowns, while SG&A expenses as a percentage of sales rose by 77 basis points, driven by growth initiatives, impairment charges, and higher fulfillment costs supporting the company's online growth. On a GAAP basis, EPS declined by 24% year over year, despite the nearly $1.2 billion the company spent on share repurchases over the past year.

Nordstrom expects net sales to increase by 3.5% to 5.5% during fiscal year 2016, with comparable sales growth between 0% and 2%. EPS is expected to be between $3.10 and $3.35, compared to $3.15 in 2015 and $3.72 in 2014.

Now what: Nordstrom had an extremely difficult fourth quarter. Backing out online sales, comparable sales at full-line stores slumped 3.2%, while comparable sales at the off-price Nordstrom Rack stores fell 3%. Online sales were the bright spot, but high costs associated with fulfilling online orders dragged earnings lower.

Shares of Nordstrom have tumbled over the past year, down about 37% including Friday's drop, and the company's outlook doesn't include much for investors to be happy about. Comparable sales growth is expected to be weak, and backing out online sales, comparable sales at Nordstrom's stores will be even weaker. Earnings during the first half of the year are expected to decline by 30%, driven by a shift in an annual sale, growth initiatives, and the sale of credit receivables last year, and Nordstrom will need to make up some serious ground during the second half in order to hit its guidance.