On Thursday, upscale retailer Nordstrom (JWN) announced that preliminary sales for the five-week period ending July 5 were $731 million, down 14.1% from last year; at the same time, same-store-sales dropped a sickening 18.6%.

The firm estimates that profits for the period will be $0.65 to $0.70 per share, as compared with the $0.67 analysts had been expecting.

The precipitous drop in comp numbers was particularly startling when compared with those of other retailers: Mall-based retail stalwart J.C. Penney (JCP), for example, reported a 2.4% same-store drop for June and in June 2007, Nordstrom itself posted a 2% comp increase.

To be fair, Nordstrom moved a critical semiannual sale from June to May for the first time this year, which certainly contributed to the drop. Due to the economic downturn, markdowns during the promotional event were also higher than expected, bringing earnings down overall.

It isn’t surprising that a luxury retailer like Nordstrom would be feeling the pinch at a time when bargain basements like Costco (COST) and Wal-Mart (WMT) are thriving.

Over the past 90 days, analysts have scaled back their full-year estimate from $2.79 to $2.74 a share; next year’s estimate has come down from $3.12 to $3.03 a share. Given this news, and the generally uncertain environment, it’s likely that they’ll ratchet expectations down even more, further pressuring the stock.

Shares are currently very near their 52-week low. Unless something turns the company around, and fast, tax loss selling could drive the stock down even further. July, which is historically Nordstrom’s second most profitable month of the year, should therefore be revealing.

Nordstrom will release second-quarter numbers, along with third-quarter and full-year estimates, on August 14th. In conjunction with the release of first-quarter earnings in May, the firm called for full-year earnings of $2.65 to $2.80 a share. Now, those will almost certainly be scaled back.

Nordstrom closed at $28.52, down $2.72 or 8.71%.