Nordstrom misses quarterly revenue estimates as inflation crimps shopping

The Nordstrom store is pictured in Broomfield, Colorado, February 23, 2017.REUTERS/Rick Wilking Acquire Licensing Rights

Nov 21 (Reuters) - Nordstrom (JWN.N) missed Wall Street targets for third-quarter revenue on Tuesday, in a sign that sticky inflation pressured consumer spending in the months leading up to the all-important holiday shopping season.

Shares of the upmarket department store chain fell nearly 3% in extended trading.

Fellow retailers Best Buy and Kohl's have also hinted at a bleak holiday season as still-high interest rates, food prices and the start of student loan repayments prompt customers to spend less and push their shopping to the last minute.

Nordstrom's eponymous label recorded a 9.4% drop in sales while discount banner Rack declined only 1.8%, its smallest fall in five quarters, as efforts to optimize inventory by bringing in trendier brands started to pay off.

That, coupled with lower markdowns, helped the company post a 180-basis point increase in gross profit for the quarter.

Quarterly total revenue fell 6.4% to $3.32 billion, missing analysts' average estimate of $3.40 billion, according to LSEG data.

On an adjusted basis, Nordstrom earned 25 cents per share for the quarter ended Oct. 28, compared with estimates of 13 cents.

Best Buy and Kohl's had trimmed their annual sales expectations to account for difficult-to-predict consumer demand in an uncertain economy, but Nordstrom maintained its forecast.

The company narrowed its annual adjusted profit forecast range to between $1.90 and $2.10, from $1.80 to $2.20 earlier, with the midpoint remaining the same.