Nordstrom slashes earnings outlook amid weak start to holiday sales

Yahoo Finance Live anchors discuss third-quarter earnings for Nordstrom.

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BRIAN SOZZI: We are coming up against the opening bell on Wall Street. But let's take a look at some trending tickers on Yahoo! Finance platform. Let's start at Nordstrom.

Shares slumping after the retailer posted better-than-expected third-quarter earnings but slashed its profit outlook ahead of Black Friday. Always-- Nordstrom shares always seem to be very volatile after earnings. It's been a couple of challenging quarters for this company.

Sales under pressure in The Rack business, the namesake Nordstrom business. Inventory increased very slightly. If anything, that was a positive here.

But really, I would say, troubling earnings call for them. It doesn't look like November has gotten off to a good start for Nordstrom, despite their higher end focus. That fits really in line what we heard a lot of other retailers.

So far, the holiday season has started off weak. Also saw Adobe online sales data, we just got about a half an hour ago, sales barely up so far in November month-to-date.

JULIE HYMAN: Well, at Nordstrom, like everybody else, is putting everything on sale.

BRAD SMITH: That's right.

JULIE HYMAN: And so that's part of the issue here. I mean, their inventory looked relatively healthy because it was like, you know, a fire sale, right? They were-- they were marking things down to move them out the door. I have to admit, I was just looking at a pair of boots at Nordstrom.

BRAD SMITH: Hey.

JULIE HYMAN: And one of the colors is on sale, but two of the colors is not.

BRIAN SOZZI: Those boots I didn't like, they were-- they were at Nordstrom?

JULIE HYMAN: Yes, the boots you didn't like were at Nordstrom.

BRIAN SOZZI: OK, all right.

JULIE HYMAN: So there you go. I ask-- I made the mistake of--

BRIAN SOZZI: Did you buy them, though?

JULIE HYMAN: --asking Brian Sozzi--

BRIAN SOZZI: Did you buy them, though?

JULIE HYMAN: Not yet.

BRIAN SOZZI: Listen, I mean, don't, please.

BRAD SMITH: [LAUGHS] Well, speaking to some of that inventory. They did see net sales decrease by about 3%. And it really was coming back to their anniversary sale. And that shifted into the second quarter.

Also their digital sales, that represented about 34% of total sales during the quarter. But here's an interesting thing, that digital sales number, it actually declined 16% this quarter.

So some weakness on the digital front. You've also got weakness at Nordstrom Rack right now, where they've got more of that approach for those 90 brands-- so the 90% of the top brands-- that waning and purchases among the lower income consumer that they deal with, too.