Nordstrom Suffers Losses As Consumers Leave Behind Even Clearance
Nordstrom stocks fell 15% today as inflation sets in deeper for many US consumers. As per a Nordstrom statement, they are even struggling to sell clearance at this point and had to make deeper markdowns than anticipated to move clearance inventory out. They expect to be hit with a $200 million profit loss the second half of the year.
“The softening trend was more significant in customer segments with the lowest income profile,” Nordstrom CEO Erik Nordstrom stated on the company’s earnings call. “While we saw greater resilience in the higher-income segments — for example, at the Nordstrom banner, items with lower AURs [average unit retail prices] underperformed — higher AURs within our designer business and higher-price luxury projects significantly outperformed lower-priced product.”
This doesn’t surprise me in the least as I’ve noticed that sale items have remained in stock across the board at many stores lately. At one point in time when something when on sale it almost immediately got snatched up. That’s simply not the case now. Most sale items are on sale and in stock for many months after they were clearanced out.
I suspect the Holiday Makeup Collections this year will be fairly minimal due to this but we’ll have to see. Last year, Holiday Collections came out and were on sale within a short time frame and I think we’ll see more of that this year but I also, think the collections will be scaled back.
What do you think?