Nordstrom Inc. on Thursday said it would end its business in Canada to help shore up profit after reporting weaker-than-expected sales results and forecasts.
“We entered Canada in 2014 with a plan to build and sustain a long-term business there,” Chief Executive Erik Nordstrom said in a statement. “Despite our best efforts, we do not see a realistic path to profitability for the Canadian business.”
The upscale department-store chain
JWN,
reported net income of $119 million, or 74 cents a share, compared with $200 million, or $1.23 a share, in its fourth quarter of 2021. Revenue came in at $4.32 billion, compared with $4.49 billion in the prior-year quarter.
Analysts polled by FactSet expected Nordstrom to report earnings per share of 67 cents, on revenue of $4.34 billion.
For the full year, Nordstrom said it expected revenue to fall 4% to 6%, and adjusted earnings per share — excluding charges related to the wind-down of its Canadian business — of between $1.80 and $2.20. FactSet forecast adjusted earnings per share of $1.98, with sales largely unchanged from fiscal 2022.
Shares edged lower by 0.7% after hours on Thursday.
Nordstrom reported as more retailers this month signal caution over their financials and shopper demand in the year ahead — but further discounts for consumers over that time as well. Clothing retailers last year slashed prices, through the holidays and earlier, as their stockrooms piled up with items that customers didn’t want, after rising food prices redirected spending toward basic priorities.
“The holiday season was highly promotional, and sales were softer than pre-pandemic levels,” Nordstrom, the chief executive, said in January. “While we continue to see greater resilience in our higher income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment.”
However, he said that the company was entering the new fiscal year with “clean inventory levels, even if this required more markdowns than planned.” He said the company was focused on being more conservative about the clothing and other goods it purchased, and focused on ways to sell items more quickly.
Management for Kohl’s Corp.
KSS,
this week said that they expected discounting among retailers to “remain competitive.” At Macy’s Inc.
M,
Chief Executive Jeff Gennette said “we believe discretionary spend will be under pressure across income tiers” this year.
Shares of Nordstrom are down 28.4% over the past 12 months. By comparison, the S&P 500 index has fallen 9.3% over that period.
