Nordstrom Inc. shares plunged 11 percent in early trading following a less-than-stellar quarterly report. The biggest concerns for analysts centered on weaker-than-expected gross margin and full-price comparable store sales, as well as a credit card issue that resulted in a one-time charge.
The disappointment followed letdowns by department-store peers Macy’s Inc. and Dillard’s Inc. earlier this week. Deutsche Bank said even amid cautious expectations, “this week proved to be much tougher than feared” for the sector. Kohl’s Corp. is the next to report earnings on Nov. 20.
Here’s what Wall Street analysts are saying.
1. Goldman Sachs, Alexandra Walvis: “While a 3Q shortfall in full price comps and gross margins was disappointing, we believe a significant portion of the miss was driven by” issues including calendar/timing shifts as well as outperformance in the U.S. off-price business, which is a headwind to gross margins.
“We believe underlying momentum in the business is strong,” and would use weakness as “an opportunistic entry point for a business with a strong competitive position, an upcoming inflection in margins and returns, and an underappreciated off-price business.”