Nordstrom shares dropped sharply at the market open Wednesday as several analysts lowered their price target on the stock. Like other traditional brick-and-mortar rivals, the upscale department store chain issued a disappointing outlook for 2020. And that profit forecast by the Seattle-based company does not take the coronavirus outbreak into account.
Department stores like Nordstrom typically rely on foot traffic and international tourism. They've been hard hit by intense competition from online giants like Amazon and discount retailers like T.J. Maxx and Marshalls.
Nordstrom's quarterly profit fell and missed analysts estimates. Higher costs stemming from the growth of its customer loyalty program and occupancy costs from the New York City flagship store it opened last year weighed on the bottom line. Revenue rose, but that, too, fell short of Wall Street's targets.
In a bid to lure new customers and retain existing ones, it's rolling out concept stores like "Nordstrom Local" that serve as pickup points for online orders and returns and provide services like styling and tailoring. And its New York store offers services such as fine dining restaurants and a full bar. On Tuesday, the company also named Erik Nordstrom as its sole CEO, scrapping its structure in which he had shared leadership with his brothers.