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Nordstrom (JWN) Q1 Earnings Beat, Stock Dips on Revenue Miss
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Nordstrom Inc. (JWN - Free Report) posted solid first-quarter fiscal 2017 earnings per share, which topped estimates and improved year over year. This also marked the company’s fourth consecutive earnings beat.
However, the company’s top-line missed prediction while comparable store sales (comps) dipped. This led shares of this leading fashion specialty retailer to drop nearly 4.1% in the after-hours trading session. Further, we note that Nordstrom has declined 26.2% in the last six months, underperforming the Zacks categorized Retail-Apparel/Shoe industry’s fall of 17.9%.
Nordstrom’s quarterly adjusted earnings of 43 cents per share came substantially ahead of the Zacks Consensus Estimate of 27 cents. The robust bottom-line results were driven by solid inventory management and operational efficiencies, along with sales growth in Nordstrom Rack and strong eCommerce performance, which now represents nearly 24% of the company’s business.
However, on GAAP basis, the company posted earnings per share of 37 cents compared with earnings of 26 cents per share in the year-ago quarter.
Sales
Total revenue advanced 3.2% to $3,354 million, but lagged the Zacks Consensus Estimate of $3,359.8 million.
The company’s net Retail sales increased 2.7% to $3,279 million, while Credit Card revenues rose 31.6% to $75 million. Further, eCommerce contributed 24% to total sales, including 11% growth at Nordstrom.com and 19% increase at Nordstromrack.com/HauteLook.
Total company comps declined 0.8% driven by fall in comps at full-line stores, mitigated by growth at Nordstrom Rack.
Nordstrom brand’s net sales (including the U.S. and Canada full-line stores, Nordstrom.com and Trunk Club) decreased 1.7%, with comps falling 2.8%. The top-performing region during the quarter was West, while the best-performing categories were Men's and Women's Apparel.
Coming to the Nordstrom Rack brand (that includes Nordstrom Rack stores and nordstromrack.com/HauteLook) net sales advanced 8.7%, while comps grew 2.3% on the back of growth in the Western region.
Operational Update
Nordstrom's Retail gross profit margin expanded 7 basis points (bps) to 34.3%, mainly on account of superb gross margin performance at full-line stores, offset by higher markdown in off-price business.
Selling, general and administrative (SG&A) expenses, as a percentage of sales, declined 70 bps to 32%, driven by planned technology expenses.
Store Update
In the fiscal first quarter, the company has opened five new Nordstrom Rack stores. Year to date, the company inaugurated a total of six Rack stores while it closed one full-line store.
As of May 11, 2017, Nordstrom operated 354 stores in 40 states, including 122 full-line stores in the U.S., Canada and Puerto Rico; 221 Rack outlets, two Jeffrey boutiques and two clearance stores.
Financials
Nordstrom ended the fiscal first quarter with cash and cash equivalents of $653 million, long-term debt net of current liabilities of $2,731 million and total shareholders’ equity of $677 million.
In the first three months of fiscal 2017, Nordstrom generated $89 million in cash from operating activities and negative free cash flow of $147 million. Capital expenditures during the quarter were $153 million.
In the fiscal first quarter, the company repurchased nearly 4.6 million shares valued at $206 million. Currently, Nordstrom has about $414 billion remaining under its share repurchase authorization.
Guidance
Following first-quarter fiscal 2017 results, the company reiterated view for fiscal 2017. It anticipates net sales to increase nearly 3–4% in fiscal 2017, with comps estimated to remain flat. The company’s guidance includes the impact of the additional 53rd week in fiscal 2017, which is likely to add about $200 million to net sales.
Further, the company expects Retail EBIT in the rage of $780–$840 million, while Credit EBIT is estimated to be about $140 million. Based on the above iterations, the company envisions fiscal 2017 earnings per share in the range of $2.75–$3.00. The current Zacks Consensus Estimate for fiscal 2017 is pegged at $2.90 per share, which is close to the higher-end of the company’s guidance.
Big 5 Sporting has gained nearly 63.2% in the last one year. Moreover, it has a long-term earnings growth rate of 12%.
Children’s Place, with a long-term earnings growth rate of 8%, has gained nearly 20.2% year to date.
Build-A-Bear has to its credit a solid earnings surprise history with an average trailing four-quarter beat of 67.5%. Moreover, the stock has a long-term earnings growth rate of 22.5%.
Sell These Stocks.
Now. Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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Nordstrom (JWN) Q1 Earnings Beat, Stock Dips on Revenue Miss
Nordstrom Inc. (JWN - Free Report) posted solid first-quarter fiscal 2017 earnings per share, which topped estimates and improved year over year. This also marked the company’s fourth consecutive earnings beat.
However, the company’s top-line missed prediction while comparable store sales (comps) dipped. This led shares of this leading fashion specialty retailer to drop nearly 4.1% in the after-hours trading session. Further, we note that Nordstrom has declined 26.2% in the last six months, underperforming the Zacks categorized Retail-Apparel/Shoe industry’s fall of 17.9%.
Nordstrom’s quarterly adjusted earnings of 43 cents per share came substantially ahead of the Zacks Consensus Estimate of 27 cents. The robust bottom-line results were driven by solid inventory management and operational efficiencies, along with sales growth in Nordstrom Rack and strong eCommerce performance, which now represents nearly 24% of the company’s business.
However, on GAAP basis, the company posted earnings per share of 37 cents compared with earnings of 26 cents per share in the year-ago quarter.
Sales
Total revenue advanced 3.2% to $3,354 million, but lagged the Zacks Consensus Estimate of $3,359.8 million.
The company’s net Retail sales increased 2.7% to $3,279 million, while Credit Card revenues rose 31.6% to $75 million. Further, eCommerce contributed 24% to total sales, including 11% growth at Nordstrom.com and 19% increase at Nordstromrack.com/HauteLook.
Total company comps declined 0.8% driven by fall in comps at full-line stores, mitigated by growth at Nordstrom Rack.
Nordstrom brand’s net sales (including the U.S. and Canada full-line stores, Nordstrom.com and Trunk Club) decreased 1.7%, with comps falling 2.8%. The top-performing region during the quarter was West, while the best-performing categories were Men's and Women's Apparel.
Coming to the Nordstrom Rack brand (that includes Nordstrom Rack stores and nordstromrack.com/HauteLook) net sales advanced 8.7%, while comps grew 2.3% on the back of growth in the Western region.
Operational Update
Nordstrom's Retail gross profit margin expanded 7 basis points (bps) to 34.3%, mainly on account of superb gross margin performance at full-line stores, offset by higher markdown in off-price business.
Selling, general and administrative (SG&A) expenses, as a percentage of sales, declined 70 bps to 32%, driven by planned technology expenses.
Store Update
In the fiscal first quarter, the company has opened five new Nordstrom Rack stores. Year to date, the company inaugurated a total of six Rack stores while it closed one full-line store.
As of May 11, 2017, Nordstrom operated 354 stores in 40 states, including 122 full-line stores in the U.S., Canada and Puerto Rico; 221 Rack outlets, two Jeffrey boutiques and two clearance stores.
Financials
Nordstrom ended the fiscal first quarter with cash and cash equivalents of $653 million, long-term debt net of current liabilities of $2,731 million and total shareholders’ equity of $677 million.
In the first three months of fiscal 2017, Nordstrom generated $89 million in cash from operating activities and negative free cash flow of $147 million. Capital expenditures during the quarter were $153 million.
In the fiscal first quarter, the company repurchased nearly 4.6 million shares valued at $206 million. Currently, Nordstrom has about $414 billion remaining under its share repurchase authorization.
Guidance
Following first-quarter fiscal 2017 results, the company reiterated view for fiscal 2017. It anticipates net sales to increase nearly 3–4% in fiscal 2017, with comps estimated to remain flat. The company’s guidance includes the impact of the additional 53rd week in fiscal 2017, which is likely to add about $200 million to net sales.
Further, the company expects Retail EBIT in the rage of $780–$840 million, while Credit EBIT is estimated to be about $140 million. Based on the above iterations, the company envisions fiscal 2017 earnings per share in the range of $2.75–$3.00. The current Zacks Consensus Estimate for fiscal 2017 is pegged at $2.90 per share, which is close to the higher-end of the company’s guidance.
Nordstrom, Inc. Price, Consensus and EPS Surprise
Nordstrom, Inc. Price, Consensus and EPS Surprise | Nordstrom, Inc. Quote
Zacks Rank & Key Picks
Nordstrom currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the retail sector include Big 5 Sporting Goods Corporation (BGFV - Free Report) , The Children’s Place Inc. (PLCE - Free Report) and Build-A-Bear Workshop, Inc. (BBW - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big 5 Sporting has gained nearly 63.2% in the last one year. Moreover, it has a long-term earnings growth rate of 12%.
Children’s Place, with a long-term earnings growth rate of 8%, has gained nearly 20.2% year to date.
Build-A-Bear has to its credit a solid earnings surprise history with an average trailing four-quarter beat of 67.5%. Moreover, the stock has a long-term earnings growth rate of 22.5%.
Sell These Stocks.
Now. Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>.