Nordstrom on Thursday reported decrease gross sales and earnings for the vacation quarter, though earnings topped Wall Avenue’s expectations.

The corporate mentioned it expects gross sales to say no within the new fiscal yr, reflecting partly its resolution to wind down its Canadian operations.

“We entered Canada in 2014 with a plan to construct and maintain a long-term enterprise there. Regardless of our greatest efforts, we don’t see a practical path to profitability for the Canadian enterprise,” CEO Erik Nordstrom mentioned in a launch Thursday.

This is what the division retailer reported for the fiscal fourth-quarter in contrast with what analysts have been anticipating, based mostly on Refinitiv estimates:

• Earnings per share: 74 cents vs. 66 cents anticipated
• Income: $4.32 billion vs. $4.34 billion anticipated

Nordstrom has struggled with slower gross sales, extra markdowns and scrutiny from a outstanding activist investor. Its internet revenue within the interval ended Jan. 28 fell to $119 million, or 74 cents per share, from $200 million, or $1.23 per share, a yr earlier.

For the brand new fiscal yr, Nordstrom expects income to fall 4% to six%. It additionally projected EPS of 20 cents to 80 cents for the yr.

Michael Maher, interim chief monetary officer, mentioned Nordstrom factored a tougher financial backdrop and better prices into its year-ahead forecast.

“We anticipate that elevated inflation and rising rates of interest will proceed to weigh on client spending, particularly within the first half of the yr,” he mentioned on a name with buyers. “We additionally anticipate persevering with inflationary strain on our bills particularly labor and transportation prices.”

He mentioned the outlook included an roughly 2.5-percentage-point unfavourable affect from the wind-down of its operations in Canada, a enterprise that drove about $400 million in gross sales within the fiscal 2022 yr.

As of Jan. 28, the corporate mentioned it had six Nordstrom shops and 7 Nordstrom Rack shops in Canada. Nordstrom mentioned it ceased its Canadian e-commerce platform Thursday. It expects to complete Canadian retailer closures in Canada by late June.

Even earlier than Nordstrom reported earnings, it reduce its forecast and instructed buyers that it had a tough vacation. In January, the division retailer chain mentioned its internet gross sales dropped 3.5% for the nine-week interval that ended Dec. 31 in contrast with the year-ago interval. Its internet gross sales declined sharply throughout that stretch at its off-price banner, Nordstrom Rack.

One of many causes for disappointing gross sales? Extra markdowns. Nordstrom mentioned it discounted merchandise greater than anticipated in November and December, so it might begin the fiscal yr with a more healthy stage of stock.

The corporate drew consideration and noticed its inventory soar in February, as activist investor Ryan Cohen purchased a big stake within the firm. Cohen, the chairman of GameStop and founding father of Chewy, is eager about utilizing that place to push for change — together with getting former Mattress Tub & Past CEO Mark Tritton off of Nordstrom’s board.

Cohen purchased, and later bought, a significant stake in Mattress Tub, after criticizing Tritton’s technique and pushing for change at that firm, too.

As of Thursday’s shut, Nordstrom shares are up greater than 19% this yr.

Learn the complete Nordstrom earnings launch.