Nordstrom Tanks After Missing Earnings Estimates

Nordstrom JWN is trading down -13.77% in the aftermarket today after reporting Q1FY2016 EPS at $0.26 vs estimate consensus of $0.46 and revenues of $3.19B vs estimates of $3.28B. Nordstrom attributed their failure due to "lower than planned sales and higher markdowns to better align inventory to current trends." Although Nordstrom missed EPS estimates, they claimed that "the younger customer-focused departments in Women's Apparel continued to reflect strength with positive comparable sales increases." Surprisingly, Nordstrom's discount stores including Nordstrom Rack increased 11.8% and comparable sales increased 4.6%. In addition to missing earnings, management cut FY16 sales growth guidance from 3.5%-5.5% to 2.5%-4.5% and cut EPS from $3.10-$3.35 to $2.50-$2.70 vs $3.20 estimates. Part of the cut was due to Nordstrom "anticipating the impact of credit chargebacks to substantially lessen in the second quarter" says management.