Nordstrom's stock fell 25% in premarket trade on Wednesday, as the retailer's third-quarter profit fell short of expectations due to higher labor costs and expenses incurred to satisfy the unexpected surge in demand.

Inventory, notably of women's apparel and shoes, fell short of consumer demand in the third quarter, and the company lost sales.

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To fulfill seasonal demand, President and Chief Brand Officer Pete Nordstrom said the firm is working to better align inventory levels with customer expectations. According to Nordstrom, one of the ways the company does this is by placing orders with its own vendors earlier so that things can be delivered sooner.

As the company hustled to satisfy demand amid labor cost pressures, total selling, general, and administrative expenses as a proportion of net sales increased 230 basis points compared to the same period last year. As a result, earnings per share were only 39 cents, much below the analysts' expectations of 56 cents.