By Dhirendra Tripathi
Investing.com – Nordstrom (NYSE: JWN ) stock slumped 25% in Wednesday’s premarket trading as higher labor costs and expenses incurred to meet the surprise comeback in demand kept the retailer’s third-quarter profit short of the estimates.
Inventory, particularly of women’s apparel and shoes, came up short of the consumer demand, and the company lost sales in the third quarter.
President and Chief Brand Officer Pete Nordstrom said the company is working to better align inventory levels with customer needs to meet holiday demand. One of the ways the company is doing this is by placing orders to its own vendors earlier so products are delivered earlier, Nordstrom said.
Total selling, general and administrative expenses, as a percentage of net sales, rose some 230 basis points compared to the same period last year as the company rushed to meet demand amid labor cost pressures. Earnings per share were thus only 39 cents, falling well short of the 56 cents analysts expected.
Net sales rose 18%, to $3.53 billion in the third quarter, beating estimates.
The company reaffirmed its annual outlook, saying revenue should grow 35% year-on-year on top of 2020’s over $10 billion.
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