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Nordstrom's gross sales drop 53% because the division retailer chain suffers from pandemic retailer closures

A person walks into the Nordstrom store, which is open for business, as New York City re-opens Phase 2 after restrictions to contain the coronavirus pandemic were imposed in New York, New York on June 29, 2020.

Rob Kim | Getty Images

Nordstrom announced Tuesday that net sales fell 53% in the second quarter as stores temporarily closed during the coronavirus pandemic and online business suffered from a delay in annual anniversary sales.

Shares fell around 7% after close of trading.

Here's how the retailer behaved in the second quarter of fiscal year compared to analyst expectations based on refinitive data:

Loss per share: $ 1.62 versus an expected loss of $ 1.48 Revenue: $ 1.86 billion versus $ 2.38 billion expected

Nordstrom reported a net loss of $ 255 million, or $ 1.62 per share, for the period ended August 1, compared to net income of $ 141 million, or 90 cents per share, a year ago. Analysts had claimed a loss of $ 1.48 per share.

Revenue, which includes credit card revenue, declined to $ 1.86 billion from $ 3.87 billion a year ago, less than what analysts estimate was $ 2.38 billion. Net sales decreased 53% from $ 3.78 billion a year ago to $ 1.78 billion.

Nordstrom said the stores, including the affordable Nordstrom Rack locations, were closed for about 50% of the days last quarter, which hurt overall results.

Online sales were down 5%, in large part because the department store chain is moving its popular anniversary sale, which usually takes place in July, to the third quarter. Excluding that impact, the company stated that digital sales grew around 20% over the reporting period.

"We are confident that we can improve sales in the second half of the year and beyond," said President Pete Nordstrom in a statement.

Earlier this year, Nordstrom announced the closure of 16 department stores as the Covid-19 crisis weighed on business.

Four major department store chains – JC Penney, Neiman Marcus, Stage Stores, and Lord & Taylor – filed for bankruptcy during the pandemic, Target and Walmart. Both Target and Walmart have had impressive results in the past few days, while mall-based companies are struggling to stay afloat.

Nordstrom's stock was down 62% this year at close of trading on Tuesday. The company has a market capitalization of $ 2.4 billion.

The full press release on the results can be found here.

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