Nordstrom Inc. stock dropped more than 20% in extended trading Tuesday after the retailer reported mixed quarterly results and said it needs to “move faster” to grow market share amid rising expenses and labor costs.
Nordstrom JWN, -1.21% said it earned $64 million, or 39 cents a share, in the third quarter, compared with $53 million, or 34 cents a share, in the year-ago period, which included a tax benefit of $19 million related to the CARES Act.
Sales rose 18% to $3.6 billion, but fell 1% in relation to the same quarter in 2019, the company said.
Third-quarter sales included about one week of the retailer’s anniversary sale, which lifted quarterly sales results by about 200 basis points, Nordstrom said.
FactSet consensus called for per-share earnings of 57 cents on sales of $3.5 billion for the quarter.
Nordstrom has “long benefited” from its focus on customer service, its merchandise mix, brand partnerships and other strengths, but it is time “to move faster to capitalize on these strengths and profitably grow market share,” Chief Executive Erik Nordstrom said in a statement.
Moreover, Nordstrom is “taking action to improve performance at Nordstrom Rack, including optimizing inventory levels, better balancing price points and increasing brand awareness,” he said.
Selling, general and administrative expenses rose in the quarter mostly due to labor costs, the company said. Nordstrom is working to improve merchandise margins to ensure it can serve customers “seamlessly, despite global supply chain challenges,” it said.
The company reiterated its fiscal 2021 outlook of total revenue rising more than 35% compared with fiscal 2020.
Shares of Nordstrom ended the regular trading day down 1.2%
This article was originally published by Marketwatch.com. Read the original article here.