Nordstrom Inc became the latest retailer to lower its financial goals for the year, citing risks of a steeper economic downturn and slowdown in consumer spending in an after-hours release, joining Macy’s Inc which issued its warning during the New York trading day on Tuesday.
Nordstrom cited weakness among shoppers at its Nordstrom Rack discount chain, which targets lower-end consumers than its flagship stores. The retailer said it is working to aggressively lower its inventory levels, which it said will also weigh on revenue growth this year.
The company reported second-quarter adjusted earnings per share of 81 cents, narrowly beating analyst predictions of 80 cents a share but Nordstrom said it now expects adjusted earnings per share of between $2.30 to $2.60 for the year, down from a range of $3.20 to $3.50. The department-store chain reported profits of $126 million in the second quarter, as sales rose 12% from the previous year.
Macy’s, the biggest US department-store chain, said it was adjusting its forecast to reflect markdowns and promotions needed to get rid of old inventory. The revision came despite Macy’s posting better-than-expected results for its second quarter on Tuesday.
The retailer saw same-store sales fall 1.5% in the second quarter from the previous year, where analysts had expected a 2% drop. Macy’s reported revenue of $5.6 billion in the second quarter, only slightly down from $5.65 billion a year earlier.
Earnings for the quarter ended July 30, 2022, came in at $275 million, compared with $345 million a year earlier. Stripping out one-time items, adjusted earnings were $1 a share, above analysts' forecasts of 86 cents a share.
Macy’s trimmed its full-year net sales forecast to between $24.34 billion and $24.58 billion, from a range of $24.46 billion to $24.7 billion. It now expects per-share earnings excluding one-time items between $4.00 and $4.20, compared with its prior forecast of between $4.53 and $4.95.
Macy’s had raised its earnings guidance in May when it reported its first-quarter results, in part to reflect improved expectations in its credit-card revenue.
Target Corporation, Best Buy Co and other retailers have revised financial goals in recent weeks, noting high inflation and dampening consumer spending were impacting financial results.
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