Nordstrom (JWN) is a high end department store that is well known in the United States of America. It was founded by John W. Nordstrom and Carl F. Wallin in the year 1901. It began as a shoe retail store but has expanded over the years to retailing clothing’s, fragrances, accessories, handbags, jewelry and cosmetics.
In the first quarter of this year, Nordstrom had amazing miss and ugly guidance reduction; its stock even plunged low about 30% in the last month. It was reported in the first quarter of the year that Nordstrom had earnings of 26 cents per share versus forecasts for 46 cents per share. Its sales were totaled to be $3.19 billion compared to the $3.28 billion which had earlier been estimated. Comparable-store sales fell 1.7%. For the remainder of the year, Nordstrom now foresees earnings of about $2.50 to $2.70 cents a share, down from $3.10 to $3.65 a share previously.
Macy’s (M) is a chain of several department stores owned by American Corporation Macy’s, Inc. it was founded in 1858 and presently operates over 800 department stores around the United States of America.
Macy’s first-quarter sales has fallen 7.4% year after year to $5.77 billion, missing forecasts for $5.94 billion. Same-store sales declined for the fifth straight quarter, falling 5.6% compared to estimates for a 3.8% decline. Its store traffic fell an alarming 7%.
But earnings, adjusted for one-time items which came in at 40 cents a share, beating forecasts for 36 cents as Macy’s bottom line benefited from $130 million in share repurchases made during the first quarter of the year. Shares outstanding fell 9.5% year after year as a result of the share repurchases, which had the effect of boosting per-share earnings.
Macy’s was forced to slash its full year same-store sales guidance to a decline in a range of 3% to 4% versus a previous estimate for a 1% drop. For the year 2016, Macy’s now sees earnings of $3.15 to $3.40 a share, down from $3.80 to $3.90 a share offered back in February 2016. Shares of Macy’s have shed about 23% in the past month. The picture was even worse at Macy’s rival at the other end of the mall, Sears.
In its bid to combat sluggish store traffic, Macy’s said it will boost the number of exclusive apparel brands which can’t be compared in price to other retailers, enhance its jewelry collections and cosmetics offerings and more quickly roll-out new clearance zones for clearance sales inside it stores. The company is also evaluating its store base for the potential closure of under-performing locations.
“One of the biggest opportunities in the mall business if you are an owner of the top 400 to 500 malls in the country is to recapture the department store that is not drawing in traffic and then re-purpose that space with retailers that could actually draw in traffic,” said General Growth Properties CEO Sandeep Mathrani in a recent interview.