Nordstrom Holiday Sales Decline; Saks Cutting Jobs; Nordstrom says consumers are being more selective; Saks e-commerce unit eliminating 100 jobs

Nordstrom Inc. became the latest retailer to report declining holiday sales as consumers tightened their spending amid persistent economic challenges.

The department-store chain said Thursday that sales during the nine weeks that ended Dec. 31 declined 3.5% from a year earlier, leading the Seattle-based company to adjust its full-year forecast.

"The holiday season was highly promotional, and sales were softer than prepandemic levels," Chief Executive Erik Nordstrom said.

Shares dropped 6.2% to $16.37 in after-hours trading.

One of Nordstrom's rivals, Saks Fifth Avenue, is cutting jobs, according to people familiar with the matter.

The luxury retailer's digital business, Saks.com, is eliminating about 100 jobs, or 3.5% of its workforce, one of the people said.

Saks.com added staff rapidly after it was split from Saks stores in March 2021. The stores also laid off a smaller number of employees recently, this person said.

The most recent holiday season was an uneven one for retailers as inflationary pressures continued to weigh on consumers. Shoppers spent less on electronics and jewelry while shelling out more for food and other nondiscretionary items. Overall retail spending in December declined at the fastest pace of 2022 , the Commerce Department said Wednesday.

Nordstrom previously warned of softer consumer demand at its Nordstrom Rack discount chain, which targets lower-income consumers, than its flagship stores. Over the holiday period, Nordstrom Rack sales declined 7.6%, while Nordstrom banner stores recorded a 1.7% sales decline.

Mr. Nordstrom said the chain's higher-income consumers continue to show greater resiliency, though "it is clear that consumers are being more selective with their spending given the broader macro environment."

Nordstrom now expects 2022 revenue growth, including retail sales and credit-card revenue, at the low end of its previously issued outlook of 5% to 7%. The company is scheduled to report its fourth-quarter and full-year financial results on March 2.

Nordstrom has been working to aggressively lower inventory levels, with more markdowns taken in the final weeks of the year. Year-end inventory levels are expected to be down by a double-digit percentage compared with last year and roughly on par with 2019 levels, the company said.

Competitors such as Macy's Inc. reported tepid demand during the holiday shopping season, noting that consumers would continue to be pressured in 2023.

Overall, 2022 holiday sales grew 5.3% to $936.3 billion, falling short of the forecast the National Retail Federation issued last year.