So much for the idea that retailers that cater to the affluent are immune to the industry’s tosses and turns.
Nordstrom (jwn) on Thursday reported comparable sales at its full service department stores fell 6.4% in the first fiscal quarter, news that followed awful numbers from Macy’s (m) and merely bad results from Kohl’s (kss) earlier in the day.
The poor showing at its brick-and-mortar luxury stores stood in contrast to its terrific results online, where sales rose 10.9% in its main brand, though not enough to mitigate the store losses. At Nordstrom’s Rack chain, comparable sales fell a tad, but the chain’s online brands, which include HauteLook, soared.
Still, overall, Nordstrom’s comparable sales fell 0.8%.
Investors, already nervous after the Macy’s, Kohl’s, and Dillard’s results earlier in the day, continued to sell off the stock— the share price fell more than 7% during the regular trading day and shed another 3% after the bell.
Though the results were better than those of its peers, they did show that Nordstrom’s efforts to expand in Canada, buy e-commerce companies like Trunk Club, and build out more Rack stores in recent years were not helping offset a secular decline in the department store business, from the low end to the high. Indeed, Rack’s comparative success suggests Nordstrom, largely seen as a well managed company, maybe cannibalizing itself and training its full price shoppers to look for deals, too.
Still, other luxury chains have been struggling too. Saks Fifth Avenue’s business appeared to finally stabilize last quarter, while Neiman Marcus continues to see a sharp sales decline.
The stock plunge was nonetheless somewhat surprising given that Nordstrom beat Wall Street forecasts on two other measures. Its adjusted profit of $0.43 a share easily beat the $0.27 that analysts were expecting. And total revenue of $3.35 billion best the $3.33 billion forecasts.