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Nordstrom (JWN) Q1 Earnings: Disappointment in Store?
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Nordstrom, Inc. (JWN - Free Report) is slated to report first-quarter fiscal 2017 results on May 11, after the closing bell. Investors are eager to know whether this leading fashion specialty retailer would be able to deliver a positive earnings surprise.
In the previous quarter, the company delivered a positive earnings surprise of 21.2%. It outperformed the Zacks Consensus Estimate by an average of 15.6% in the trailing four quarters with a beat delivered in the last three quarters. The Zacks Consensus Estimate for the quarter has remained stable at 27 cents in the past 30 days, and is a penny higher than the year-ago quarter earnings.
Further, analysts polled by Zacks expect revenues of $3,345 million, up nearly 3% from the reported sales in the year-ago quarter.
Let’s look at how things are shaping up for the company before this announcement.
Factors Impacting This Quarter
Nordstrom’s presence in the consumer-driven apparel space, keeps the company exposed to the risks of changing tastes, preferences and spending behavior of consumers. Also, stiff competition from other players remains a threat to margins. Further, the seasonal nature of the company’s business may hurt results if any season fails to deliver. Year-to-date, Nordstrom’s shares have increased 2.5% compared with the Zacks categorized Retail–Apparel/Shoe industry that declined 7.2%.
However, we believe that Nordstrom is expected to gain out of online sales, which during fiscal 2016 had accounted for almost 25% of sales. Hence focusing upon digital operations is considered crucial for the company. In terms of cost savings it plans to establish balance between sales and expense growth. Additionally, the company has remained consistent with store expansion strategy, particularly in Canada.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Nordstrom is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Earnings ESP for Nordstrom is currently pegged at 0.00%, as both the Zacks Consensus Estimate and the Most Accurate Estimate is at 27 cents.
However an earnings ESP of 0.00% combined with a Zacks Rank #4 (Sell) lowers the predictive power of ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The Home Depot, Inc. (HD - Free Report) has an earnings ESP of +0.62% and carries a Zacks Rank #2.
Wayfair Inc. (W - Free Report) has an earnings ESP of +1.24% and carries a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Nordstrom (JWN) Q1 Earnings: Disappointment in Store?
Nordstrom, Inc. (JWN - Free Report) is slated to report first-quarter fiscal 2017 results on May 11, after the closing bell. Investors are eager to know whether this leading fashion specialty retailer would be able to deliver a positive earnings surprise.
In the previous quarter, the company delivered a positive earnings surprise of 21.2%. It outperformed the Zacks Consensus Estimate by an average of 15.6% in the trailing four quarters with a beat delivered in the last three quarters. The Zacks Consensus Estimate for the quarter has remained stable at 27 cents in the past 30 days, and is a penny higher than the year-ago quarter earnings.
Further, analysts polled by Zacks expect revenues of $3,345 million, up nearly 3% from the reported sales in the year-ago quarter.
Let’s look at how things are shaping up for the company before this announcement.
Factors Impacting This Quarter
Nordstrom’s presence in the consumer-driven apparel space, keeps the company exposed to the risks of changing tastes, preferences and spending behavior of consumers. Also, stiff competition from other players remains a threat to margins. Further, the seasonal nature of the company’s business may hurt results if any season fails to deliver. Year-to-date, Nordstrom’s shares have increased 2.5% compared with the Zacks categorized Retail–Apparel/Shoe industry that declined 7.2%.
However, we believe that Nordstrom is expected to gain out of online sales, which during fiscal 2016 had accounted for almost 25% of sales. Hence focusing upon digital operations is considered crucial for the company. In terms of cost savings it plans to establish balance between sales and expense growth. Additionally, the company has remained consistent with store expansion strategy, particularly in Canada.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Nordstrom is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Earnings ESP for Nordstrom is currently pegged at 0.00%, as both the Zacks Consensus Estimate and the Most Accurate Estimate is at 27 cents.
However an earnings ESP of 0.00% combined with a Zacks Rank #4 (Sell) lowers the predictive power of ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Nordstrom, Inc. Price, Consensus and EPS Surprise
Nordstrom, Inc. Price, Consensus and EPS Surprise | Nordstrom, Inc. Quote
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Best Buy Co., Inc. (BBY - Free Report) has an earnings ESP of +12.5% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Home Depot, Inc. (HD - Free Report) has an earnings ESP of +0.62% and carries a Zacks Rank #2.
Wayfair Inc. (W - Free Report) has an earnings ESP of +1.24% and carries a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>