Nordstrom reports 68 pct drop in 4th-qtr profit

Upscale retailer Nordstrom Inc. reported late Monday that its fourth-quarter earnings fell 68 percent largely due to heavy discounting over the holiday shopping season and said its earnings for the year could miss Wall Street estimates.

The Seattle-based chain said Monday that it earned $68 million, or 31 cents per share, in the quarter that ended Jan. 31. That compares with $212 million, or 92 cents per share, a year earlier.

Sales in the quarter fell 8.5 percent to $2.3 billion from $2.5 billion. Analysts surveyed by Thomson Reuters forecast earnings of 30 cents per share on revenue of $2.28 billion.

Year-end inventory per square foot was down 12 percent from the prior year, in line with the 12.5 percent drop in same-store sales for the quarter. Gross profit as a percentage of sales decreased 5.61 percentage points compared with last year's fourth quarter due to heavy markdowns.

The company's regular-price stores suffered a same-store sales drop of 15.8 percent, while its off-price division called Nordstrom Rack posted a 1.5 percent decline.

For the full year, Nordstrom reported net profit of $401 million, or $1.83 per share, compared with $715 million, or $2.88 per share a year earlier.

Total sales fell 6.3 percent to $8.3 billion from $8.8 billion, while same-store sales fell 9 percent.

For the current fiscal year, Nordstrom forecast same-store sales will slip between 10 percent and 15 percent, which would yield earnings per share between $1.10 and $1.40. Analysts surveyed by Thomson Reuters expects earnings of $1.22 per share for the current year.

The company said that, given the uncertain economy, it no longer will provide a quarterly earnings outlook.

Nordstrom shares fell 4.7 percent to $11.33 as the overall market fell, but they added $1.20, to $12.53 in after-hours trading after the earnings report was released.

Like many luxury retailers, Nordstrom has seen a precipitous drop in sales since the financial meltdown ballooned in September. Saks Inc., which operates Saks Fifth Avenue, is expected to report a loss in the fourth quarter on Wednesday.