Nordstrom Shares Plummet As Q3 EPS Lags Consensus

Nordstrom Inc JWN reported third-quarter FY21 sales growth of 17.7% year-on-year, to $3.53 billion. Total revenues were $3.64 billion. Net sales decreased 1% relative to the same period in FY19.

• Digital sales, which constituted 40% of total sales, fell 12% Y/Y.
• Net sales for Nordstrom Rack decreased 8% versus the Q3 of FY19.
• The gross profit margin expanded 230 basis points to 35%.
• EPS of $0.39 missed the Wall Street view of $0.56.
• As of October 30, 2021, the company's debt was $3.1 billion, and the adjusted EBITDAR was $1.1 billion.
• Adjusted EBITDA for nine months was $611 million versus $(500) million last year.
• The company held $267 million in cash and equivalents as of October 30, 2021. Cash provided by operating activities for the nine months totaled $277 million.
• "We're taking action to improve performance at Nordstrom Rack, including optimizing inventory levels, better balancing price points and increasing brand awareness. Work is also underway to improve merchandise margin across the Company and ensure we have the visibility and flexibility we need to serve our customers seamlessly, despite global supply chain challenges," said CEO Erik Nordstrom.
• Outlook: Nordstrom reaffirmed financial expectations for FY21 revenue, including retail sales and credit card revenues, to grow more than 35% Y/Y.
• Price action: JWN shares are trading lower by 25.3% at $23.84 in premarket on the last check Wednesday.