NEW YORK (AP) — Nordstrom on Thursday joined the ranks of major retailers cutting their profit outlooks for the year, citing disappointing sales from its more affluent shoppers.
The bleaker forecast from the department store operator came despite a higher profit for the second quarter, which got a boost from the chain's Annual Sale. Its stock fell 3.3 percent to $57.40 in after-hours trading Thursday.
Macy's Inc. and Wal-Mart Stores Inc., the world's biggest retailer, also cut their outlooks for the year in reporting their quarterly results. But Nordstrom's move raises concerns about more affluent consumers, whose spending has been rebounding since the recession.
The company, based in Seattle, is considered a barometer of luxury spending and growth in the sector is seen as a good sign for the economic recovery. But its shoppers apparently weren't immune to the pressures being felt in the broader economy.
Nordstrom is also grappling with new demands from shoppers armed with smartphones. That's pushing the department store, considered the gold standard in customer service, to make changes such as offering free shipping for online orders. Additionally, the company is looking for growth beyond the U.S. and is heading to Canada starting next year.
For the quarter, Nordstrom said sales at stores open at least a year rose 4.4 percent. But for its luxury department stores, the measure slipped 0.7 percent. It said the Southeast and Southwest delivered the strongest results.
Nordstrom also sells clothing in its Rack stores, online and through catalogs. For the quarter through Aug. 3, the company says it earned $184 million, or 93 cents per share, topping the 88 cents per share analysts expected. In the same period a year ago, Nordstrom earned $156 million, or 75 cents per share.
Revenue rose 6 percent to $3.2 billion, but was short of the $3.29 billion Wall Street expected, according to FactSet. Looking ahead, the company now expects sales at stores open at least a year to rise 2 to 3 percent, compared with its prior outlook of 3 to 5 percent.
Its earnings are expected to be $3.60 to $3.70 per share. That's down from its previous forecast of $3.65 to $3.80 per share. Its stock is up 5 percent over the past 12 months.