Nordstrom Inc., which investors thought would be more insulated because of its affluent customer base, sank after trimming its full-year outlook as the retailer’s Rack business slows amid lower demand and inventory buildup.
The department-store operator lowered its forecast for full-year sales to a range of 5 per cent to 7 per cent . That one-percentage-point cut comes just three months after Nordstrom had raised its outlook. Nordstrom also trimmed its forecast for earnings per share on Tuesday.
On a call with investors, executives said they observed a clear slowdown at the end of June, particularly among lower-income customers. Now, Nordstrom will move to aggressively clear out inventory, a profit-eroding measure that’s also been necessary at other retailers, including Macy’s Inc. and Walmart Inc. After getting burned by supply-chain delays during the last holiday season, companies had ordered more goods to meet demand, only to see customers abruptly shift their spending priorities in the wake of easing pandemic restrictions and decades-high inflation.Bnn Bloomberg