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Nordstrom warns on 3Q
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October 11, 2000: 9:26 a.m. ET
Charges, lower sales to cut earnings 23-27cents a share, may cause loss
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NEW YORK (CNNfn) - Upscale retail chain Nordstrom Inc. warned Wednesday that non-recurring charges and lower-than-anticipated sales could have a severe impact on third-quarter earnings, and the retailer may post a loss.
Seattle-based Nordstrom (JWN: Research, Estimates) said it expects lower-than-anticipated sales, above-plan markdowns plus miscellaneous expenses will lower operating results by 4 to 7 cents a share. These results and the one-time charges could cut earnings by 23 to 27 cents a share.
Earnings tracker First Call had anticipated earnings for the quarter of 24 cents a share.
 A Nordstrom spokeswoman said it is possible the retailer could show a loss for the quarter. However, without the non-recurring charges of 19 to 20 cents a share, earnings would be about 17 to 20 cents a share.
Nordstrom estimated it would take $41 million to $43 million in one-time charges. The Seattle retailer will take a one-time pre-tax charge of $18 million to $20 million from its 1998 investment in Streamline.com Inc. It also will take nearly $13 million in severance costs from senior management restructuring during the third quarter and a $10 million write-off from technology investments.
In July, the retailer also warned that it would miss Wall Street earnings forecast for the second quarter by 12 to 16 cents a share.
Nordstrom plans to announce third-quarter results Nov. 15.
Nordstrom's warning Wednesday is the latest in a string to come from retailers, which are feeling the impact of a slowing economy. On Oct. 4, Gap Inc. revealed that same-store sales fell 8 percent in September due to increased markdowns and inventory backlog. Gap (GPS: Research, Estimates) will report third-quarter earnings Nov. 9.
On Oct. 5, J.C. Penney Inc. (JCP: Research, Estimates) disclosed that increased promotion costs and sluggish retail sales would cause it to miss third-quarter earnings. The Plano, Texas-based company said it expects to report results ranging from a small profit to a loss for the period.
Large store chains such are Wal-Mart, the nation's No. 1 retailer, also are feeling the impact. Wal-Mart (WMT: Research, Estimates) warned that higher fuel prices and an overall consumer spending slowdown will temper sales for the rest of the year.
Nordstrom shares closed unchanged at $15.69 Tuesday ahead of the release, J.C. Penney gained 12 cents to $9.50, Gap traded flat at $21, and Wal-Mart was unchanged at $46.38. 
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