Everyone is aware of the fact that the retail industry is going through tough times from past few years especially after the e-commerce got to the driving seat. With the consumers getting comfy with online shopping, things are getting particularly difficult for stores that had substantial brick-and-mortar assets. Nordstrom is one such company that always sets itself aside from the rest by offering one–on–one customer services in its stores.
Now that the consumer behavior is changing, the companies are trying to adapt to the changes but it is taking time. This delay in the adaptation to the changing scenarios is taking a toll on the results of the companies.
Nordstrom came out with Q1 results on Thursday and managed to show better-than-expected performance in its bottom line, although some pressure was seen on the top line performance of the company.
The company reported adjusted earnings of 43 cents on the revenue of $3.35 billion, which was much more than the analysts’ expectations of 27 cents on revenue of $3.34 billion. The total same-store sales, however, fell 0.8 percent against the estimate for a 0.1 percent drop. The company revealed that its net income went up to $63 million from $46 million a year back and this jump is attributed to the strong demand at its off-price stores, Nordstrom Rack.
The online sales for the company comprise of 24 percent of the total net sales in Q1. The online sales growth at Nordstrom.com is 11%, while that at Nordstromrack.com is 19 percent.
The investors didn’t like the quarterly results of the company and punished the stock. The stock was already taking the beating due to concerns in the broader retail industry and it further went down by 5% in after-hours trading. The road ahead to convince its shareholders that the worst is over looks tough for the retailer.