The firm said it believes that general consumer demand has softened since January and the conflict with Iraq has further impacted results.
Jennifer Black, an analyst with Wells Fargo Securities, said she believed the Nordstrom’s sales shortfall is attributable to macroeconomic and geopolitical issues, rather than with the merchandise, which she described as well balanced and appealing to its core customers.
"Although the current environment is making it tough for Nordstrom to generate positive comps, we continue to believe the company’s product mix looks well balanced and substantially better than what we are seeing in the more traditional, as well as the more upscale, department stores," she wrote in a research note.
Black anticipates an acceleration of markdowns in April and lowered her first-quarter earnings estimate to 19 cents from 28 cents.
Goldman Sachs analyst Adrianne Shapira is also looking for Nordstrom’s first-quarter profits to come in at 19 cents a share. Additionally, she noted, "The combination of war with Iraq, unseasonably cool weather and a late Easter shift has exacerbated already soft consumer demand for most mall-based retailers beyond Nordstrom. However, Nordstrom’s lofty valuation of 13.2 times fiscal 2003 earnings per share estimates appears even more unwarranted. We continue to rate the shares in line across our neutral coverage view."