Nordstrom (JWN) announces results for the second quarter of 2022

Nordstrom On Tuesday, it lowered its full-year financial forecast as the supermarket chain faces a glut of inventory and slowing demand.

The retailer’s lower expectations came even as it reported fiscal second-quarter earnings and sales ahead of analyst estimates. Its shares are down 13% in extended trading. earlier in the day, Messi also It lowered its forecast for the whole yearsaying it expects declining consumer spending on discretionary goods such as clothing will force it to use big cuts to move goods off the shelves.

“Customer traffic and demand slowed significantly beginning in late June, mostly at Nordstrom Rack,” Nordstrom CEO Eric Nordstrom said in a press release. “We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses with recent trends.”

Nordstrom is now seeing annual sales, including credit card revenue, increase 5% to 7%, compared to a previous group that required a 6% to 8% increase. It calls for adjusted earnings per share to be in a range of $2.30 to $2.60, down from a previous forecast of $3.20 to $3.50.

Here’s how Nordstrom performed in the fiscal second quarter compared to what analysts had been expecting, based on Refinitiv estimates:

• Earnings per share: 81 cents adjusted to 80 cents expected
• Revenue: $4.1 billion vs. $3.97 billion forecast

Nordstrom’s net income for the three months ended July 30 grew to $126 million, or 77 cents per share, from $80 million, or 49 cents per share, the previous year.

Sales rose to $4.10 billion from $3.66 billion. Within that, digital sales rose 6.3%, making up 38% of total revenue.

Nordstrom said its menswear division had the strongest growth compared to 2021, as shoes, womenswear and cosmetics booked double-digit gains as shoppers searched for fashion for special occasions.

Nordstrom’s banner net sales grew 14.7%, supported in part by the company’s annual sale timing. At Nordstrom Rack, the company’s non-price banner, net sales were up 6.3% from the previous year but were down compared to pre-pandemic levels.

Company-wide inventory levels are up nearly 10% compared to the same period last year.