NEW YORK (AP) — It's turning out to be an ugly earnings season for major U.S. retailers.
Nordstrom's shares tumbled in extended trading Thursday after the upscale department store slashed its annual sales and profit outlook.
The reduced guidance came as the Seattle-based chain reported that its first-quarter earnings dropped 64 percent as a key sales measure — sales at stores opened at least a year — declined for the first time in almost seven years.
Nordstrom joins a parade of major retailers including Macy's and Kohl's that have reported weak first-quarter results, citing a drop-off in spending since mid-March.
Kohl's earlier Thursday reported first-quarter results that missed analysts' estimates and posted the biggest decline for the key revenue measure since the first quarter of 2009. Macy's slashed its profit and sales expectations for the year. Its key revenue measure also marked the biggest drop since the recession.
Gap also cut its forecast earlier in the week, noting that a turnaround for spring has yet to materialize. The clothing chain will be reporting final first-quarter results next week.
Nordstrom said that it planned to cut inventory and expenses to weather this tough landscape.
"As the pace of change in retail continues to accelerate, we remain committed to serving customers by taking steps that will continue to meet their expectations while driving profitable growth," said Blake Nordstrom, co-president of Nordstrom Inc.
Nordstrom said that it had to mark down merchandise more aggressively to clear out inventory, eating into profit margins.
The department store chain had been a stellar performer but in recent quarters it has seen a slowdown in sales. In the latest, the weakness deepened. Like other retailers, Nordstrom is expanding its e-commerce services while trying to spruce up technology in its stores. In particular, mall-based retailers have felt the squeeze.
"I think it's pretty well-documented out there that mall traffic overall has been soft over the last couple of quarters," said Jamie Nordstrom, president of Nordstrom Stores. "We've seen some data recently of the last month or two that it was down approximately double digits. And we notice that. We're ... primarily in malls and when we see mall traffic down, it hurts us."
Nordstrom earned $46 million, or 26 cents per share, for the quarter ended April 30. That compares with $128 million, or 66 cents per share, last year.
Sales rose 1 percent to $3.25 billion, including credit card revenue. But the key revenue measure was down 1.7 percent, marking the first drop since third quarter of 2009 when that measure was down 1.2 percent.
At its full-price department stores, that figures was down 4.3 percent, while its Nordstrom Rack chain enjoyed a 4.6 percent gain.
Analysts had forecast earnings per share of 47 cents on revenue of $3.29 billion, according to FactSet.
Nordstrom now expects full-year earnings in the range of $2.50 to $2.70 per share. It had previously forecast earnings between $3.10 and $3.35 a share.
It now expects that this year its sales at stores opened at least a year will range from a decline of 1 percent to an increase of 1 percent. Its earlier forecast was them to be flat or up 2 percent.
The retailer's stock fell 17 percent, or $7.65 per share, to $37.58 in after-hours trading Thursday.