Nordstrom lowers annual forecast as inflation hits demand

By

Benjamin Fitzgerald

Published
Aug 24, 2022

Nordstrom Inc cuts its annual revenue and profit forecasts on Tuesday, a sign that decades-high inflation was squeezing consumer spending on its high-end clothing and footwear.

Shares of the Seattle-based firm fell about 10% in extended trading.

Runaway inflation has prompted consumers to shift spending away from clothing and other discretionary items to groceries, hitting sales at apparel retailers and driving up inventories.

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That has led companies including Kohl's Corp and Macy's Inc to offer steep discounts ahead of the back-to-school season, a crucial period for retailers.

Nordstrom said it expects fiscal 2022 revenue to rise 5% to 7%, lower than its previous expectation of 6% to 8% growth.

The company forecast fiscal 2022 adjusted profit per share between $2.30 and $2.60, compared with $3.20 to $3.50 previously.

Total revenue rose to $4.10 billion in the second quarter ended July 30, from $3.66 billion a year earlier. Analysts on average were expecting a figure of $3.97 billion, according to Refinitiv data.

Nordstrom's net income rose to $126 million, or 77 cents per share, from $80 million, or 49 cents per share, a year earlier.