(AOF) – The American chain of department stores Nordstrom lowered its annual forecast in a context of high inflation which affects demand. The stock was down about 10% in trading after the close on Wall Street. The high-end US retailer reported second-quarter net profit of $126 million (vs. $80 million) and EPS of $0.77 (vs. $0.49).
Revenue of $4.095 billion jumped 12% from the same period in fiscal 2021, surpassing pre-pandemic sales levels.
“While our quarterly results were in line with our previous outlook, traffic and customer demand slowed significantly from the end of June, primarily at Nordstrom Rack. We are adjusting our plans and taking steps to navigate this dynamic. in the near term, including aligning inventory and spending with recent trends, and we remain confident in our ability to achieve our long-term strategic and financial goals,” said Chairman and Chief Executive Officer Erik Nordstrom.
Nordstrom has lowered its earnings per share forecast to between $2.45 and $2.75, down from $3.38 to $3.68 previously.
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big concerns
According to the Federation of specialized trade, Procos, activity from January to May is very significantly down compared to the same period in 2019, at – 8.8%. Store traffic in May 2022 remained lower than in May 2019, but the decline was limited to 6.5%, much better than in April (-19.6% compared to April 2019). In a very uncertain context, several elements weigh on the profitability of companies, in particular the increase in the cost of electricity and the indexation of rents, even if the composition of the ILC (commercial rent index) has been modified. Previously it was composed of 50% inflation, 25% construction cost index and 25% change in retail turnover. From now on, it will only take into account inflation and the cost of construction because the previous formula included sales made by the ‘pure players’ of the Net, which increased the rents of physical stores.