Nordstrom slides as 'historic' theft, weakened consumers cloud earnings

Updated at 7:15 am EDT

Nordstrom  (JWN) - Get Free Report shares edged lower in pre-market trading, paring outsized gains that followed the release of its second quarter earnings, after the retail forecast higher default rates on its credit cards amid a cautious consumer environment. 

Nordstrom, which targets a higher-income consumer base than many of its department store rivals, said adjusted profits for the three months ending in July came in at 84 cents per share, up 3.7% from last year and firmly ahead of the Street consensus forecast of 45 cents.

Overall revenues were down 8.3% to $3.66 billion, a tally that also beat analysts' estimates of a $3.65 billion tally.

Nordstrom also said that store theft levels hit an all-time high over the quarter, echoing concerns expressed by other retailers over the first half of the year, and noted that payment delinquencies on store issued credit cards had accelerated above pre-pandemic levels and would worsen over the back half of the year.

"Losses from theft are at historical highs. And I'd say we find it unacceptable and needs to be addressed. That being said, while it's unacceptable, it is within our plans," CEO Erik Nordstrom told investors on a conference call late Thursday. "We have not seen continuing rising of shrinkage that has exceeded what we planned."

"The drag on earnings, just from a financial performance, that needs to come down," he added. "And we've done a lot of things, and we're looking at everything we can do to make our stores safe and secure, first of all, but also to address the loss."

Nordstrom shares were marked 2.44% lower in pre-market trading to indicate an opening bell price of $16.41 each. 

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