Nordstrom Shares Continue To Fall As Inventories Rise

The stock of Nordstrom Inc. fell Friday for the sixth straight session as investors acted on concerns over growing inventories, Dow Jones News Service reported.

Prudential Securities Inc. analyst Wayne Hood said rising inventories at the Seattle apparel chain are putting pressure on the company’s shares.

Hood said although same-store sales for the fiscal fourth-quarter are on track for a 9 percent to 10 percent gain, inventories are up even more. “People are concerned about that buildup,” he said.

Nordstrom shares dropped $4.62-1/2 Friday to $44.87-1/2 on the Nasdaq Stock Market. On Thursday, Nordstrom stock fell $1.50 to $49.50.

While sales growth is ahead of expectations, bulging inventories raise the likelihood of higher markdowns, thereby undercutting at least some of the sales gains.

Any further inventory growth during the remainder of the quarter, which ends Jan. 31, likely will hurt the company even more, given that samestore sales for January are expected to be relatively flat.

Inclement weather in the Pacific Northwest, which could hurt sales in the Oregon and Washington markets, also may be putting pressure on the shares, Hood said.

Nordstrom officials said Friday that the company’s fourth-quarter earnings are unlikely to meet analysts’ expectations.

The First Call consensus estimate for the fourth-quarter is 79 cents per share, but the company said it currently believes earnings per share will range between 72 and 77 cents per share. For fourth-quarter 1996, Nordstrom earned 53 cents per share.

The company said sales slowed during the last week of December. The softened sales trend has continued into January, the last month of the quarter.

Nordstrom will report fourth-quarter and year-end results Feb. 23. The fashion specialty retailer has 92 stores in 20 states.

Some of the stocks that moved substantially or traded heavily on Friday:

NYSE

Boston Scientific, up 3-1/2 at 46-9/16.

The medical device maker reported a 14 percent increase in fourth-quarter sales. Boston Scientific, based in Natick, Mass., plans to release full earnings figures for the quarter next month.

Central Newspapers, down 3-3/8 at 65-1/2.

The Indianapolis-based newspaper chain said its fourth-quarter earnings will come in below Wall Street forecasts. The company blamed slower growth in advertising revenues.

American Residential Services, down 3-11/16 at 10-1/4.

The Houston-based home appliance services company said Thursday it expects a fourth-quarter loss.

Briggs & Stratton, down 2-11/16 at 44-1/8.

The Milwaukee-based engine maker reported a 38 percent decline in second-quarter earnings.

NASDAQ

Sun Microsystems, up 2-1/16 at 45-1/8.

The maker of computer systems for businesses reported late Thursday a 16 percent drop in second-quarter profits, largely due to acquisition costs, but the results exceeded expectations as sales grew 18 percent.

Microchip Technology, down 5-7/8 at 21-7/8.

The chip maker reported third-quarter earnings below analyst expectations, due in part to a legal settlement with Lucent Technologies that will cost the company $5 million. Microchip is based in Chandler, Ariz.

Intelliquest Information Group, down 4 at 9-1/4.

The technology marketer said it expects to post a fourth-quarter loss of $600,000 to $800,000. Intelliquest is based in Austin, Texas.

Elantec Semiconductor, up 1-7/16 at 7-7/16.

The semiconductor maker posted a profit in its first quarter, turning around from a modest loss in same period a year earlier. Elantec is based in Milpitas, Calif.