Nordstrom, Inc. admits that it erroneously overcharged some of its customers on their credit cards, and is refunding them. The news sent its shares down -11% in after-market trading on Thursday.
The luxury department store chain revealed on Thursday that it will refund $72 million to customers who were incorrectly charged higher interest rates on store credit cards that were delinquent. “We sincerely apologize to these cardholders. We realize customers and shareholders place a great deal of trust in us, and that’s a responsibility we take seriously,” Nordstrom said on a conference call with analysts.
Nordstrom’s compensation to customers subtracted 29 cents from its earnings per share for the latest reported quarter. During the 3 months ending November 3, Nordstrom’s earnings came in at $67 million ( 39 cents a share), plunging -42% from $114 million (67 cents a share) of the year-ago period. Analysts had expected Nordstrom to earn 66 cents a share.
Revenue, however, increased +3% to $3.75 billion from a year ago, and beat estimate of $3.69 billion. The company registered a +2.3% growth in sales at stores open for at least a year, exceeding Wall Street expectations of a +2.2% increase.