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After Macy's Sputters, What Should We Expect from Nordstrom & JCPenney?
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Shares of Macy’s (M - Free Report) were down nearly 14% in afternoon trading Wednesday after the department store giant’s second-quarter revenue fell short of expectations. While there were plenty of positives to pick out from the latest Macy’s report, the stock sold off amid market-wide volatility and concerns about sales performance.
Macy’s posted adjusted earnings of 59 cents per share, beating the Zacks Consensus Estimate by a dime. Comparable sales were up 0.5% in the quarter, but total net sales of $5.57 billion missed our consensus estimate and slumped 1.1% year over year.
Nevertheless, Macy’s raised earnings and sales projections for fiscal 2018, and management continues to tout its digital growth, in-store improvements, and consumer confidence as reasons to be optimistic. Still, with the stock up more than 60% on the year heading into the report, expectations were high, and a sales miss was not what investors wanted to see.
With Macy’s sputtering after earnings, Wall Street’s attention will now shift to its industry rivals, Nordstrom (JWN - Free Report) and J.C. Penney , which are both due to post their latest quarterly earnings reports tomorrow. J.C. Penney will report before the bell, while Nordstrom will post its results after the market closes.
Estimates and Expectations
According to our latest Zacks Consensus Estimates, analysts expect JCP to report a loss of eight cents per share and revenue of $2.89 billion. This bottom-line result would represent an improvement of 11% from the year-ago period, while the revenue projection is calling for a year-over-year slump of nearly 3%.
Meanwhile, Nordstrom is projected to post earnings of $0.83 per share and revenue of $3.99 billion, according to our most recent consensus estimates. These figures would represent year-over-year growth of 28% and 5%, respectively.
Latest Trends
Of course, it is important for investors to note the latest trends heading into these reports. In terms of earnings estimates, JCP’s expectations have been moving downward over the duration of the quarter, with our Zacks Consensus Estimate for the period dropping six cents in the past 90 days and a penny in the past week.
For JWN, the earnings estimate trend has been more favorable, as the Zacks Consensus Estimate has climbed two cents in the trailing three months, including adding a penny within the last 30 days.
In terms of share price movement, J.C. Penney had lost about 16% while Nordstrom had gained about 16% on the year heading into today. Both stocks are down significantly today, however. Through late afternoon trading hours, JCP was down more than 10% and JWN had shed about 6%.
More generally though, we can also attempt to gauge industry and company-specific trends ahead of these reports. Looking back at Macy’s, management cited impressive performance at not only its namesake and Bloomingdale’s stores, but also its trendy beauty chain, Bluemercury. So where might performance come from for its retail rivals?
Well, for Nordstrom, investors will likely be hoping to see robust results from the company’s new moonshot initiatives—including the online personal styling service Trunk Club and the no-inventory concept store Nordstrom Local—as well as its discount outlets, Nordstrom Rack, which give the company exposure to a segment where it competes more with the likes of Ross Stores (ROST - Free Report) and TJ Maxx (TJX - Free Report) .
Similarly, J.C. Penney investors will hope to see an indication that the company’s merchandising initiatives are paying off. These initiatives have included enhanced partnerships with iconic brands like Nike, Champion, and Puma and the integration of Fitbit into J.C. Penney’s health and wellness products. The retailer has also seen its in-store Sephora departments act as a key catalyst in recent years.
Bottom Line
A harsh reaction to slightly-sluggish sales at Macy’s caused an industry-wide selloff among the department store stocks today, but Nordstrom and J.C. Penney have the opportunity to bounce back quickly with strong reports tomorrow.
Each company has plenty of potential drivers which might lift results, but Wall Street will be looking for nearly all of these shots to land, so investors will want to keep a close eye on the what and why of each report tomorrow.
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After Macy's Sputters, What Should We Expect from Nordstrom & JCPenney?
Shares of Macy’s (M - Free Report) were down nearly 14% in afternoon trading Wednesday after the department store giant’s second-quarter revenue fell short of expectations. While there were plenty of positives to pick out from the latest Macy’s report, the stock sold off amid market-wide volatility and concerns about sales performance.
Macy’s posted adjusted earnings of 59 cents per share, beating the Zacks Consensus Estimate by a dime. Comparable sales were up 0.5% in the quarter, but total net sales of $5.57 billion missed our consensus estimate and slumped 1.1% year over year.
Nevertheless, Macy’s raised earnings and sales projections for fiscal 2018, and management continues to tout its digital growth, in-store improvements, and consumer confidence as reasons to be optimistic. Still, with the stock up more than 60% on the year heading into the report, expectations were high, and a sales miss was not what investors wanted to see.
With Macy’s sputtering after earnings, Wall Street’s attention will now shift to its industry rivals, Nordstrom (JWN - Free Report) and J.C. Penney , which are both due to post their latest quarterly earnings reports tomorrow. J.C. Penney will report before the bell, while Nordstrom will post its results after the market closes.
Estimates and Expectations
According to our latest Zacks Consensus Estimates, analysts expect JCP to report a loss of eight cents per share and revenue of $2.89 billion. This bottom-line result would represent an improvement of 11% from the year-ago period, while the revenue projection is calling for a year-over-year slump of nearly 3%.
Meanwhile, Nordstrom is projected to post earnings of $0.83 per share and revenue of $3.99 billion, according to our most recent consensus estimates. These figures would represent year-over-year growth of 28% and 5%, respectively.
Latest Trends
Of course, it is important for investors to note the latest trends heading into these reports. In terms of earnings estimates, JCP’s expectations have been moving downward over the duration of the quarter, with our Zacks Consensus Estimate for the period dropping six cents in the past 90 days and a penny in the past week.
For JWN, the earnings estimate trend has been more favorable, as the Zacks Consensus Estimate has climbed two cents in the trailing three months, including adding a penny within the last 30 days.
In terms of share price movement, J.C. Penney had lost about 16% while Nordstrom had gained about 16% on the year heading into today. Both stocks are down significantly today, however. Through late afternoon trading hours, JCP was down more than 10% and JWN had shed about 6%.
More generally though, we can also attempt to gauge industry and company-specific trends ahead of these reports. Looking back at Macy’s, management cited impressive performance at not only its namesake and Bloomingdale’s stores, but also its trendy beauty chain, Bluemercury. So where might performance come from for its retail rivals?
Well, for Nordstrom, investors will likely be hoping to see robust results from the company’s new moonshot initiatives—including the online personal styling service Trunk Club and the no-inventory concept store Nordstrom Local—as well as its discount outlets, Nordstrom Rack, which give the company exposure to a segment where it competes more with the likes of Ross Stores (ROST - Free Report) and TJ Maxx (TJX - Free Report) .
Similarly, J.C. Penney investors will hope to see an indication that the company’s merchandising initiatives are paying off. These initiatives have included enhanced partnerships with iconic brands like Nike, Champion, and Puma and the integration of Fitbit into J.C. Penney’s health and wellness products. The retailer has also seen its in-store Sephora departments act as a key catalyst in recent years.
Bottom Line
A harsh reaction to slightly-sluggish sales at Macy’s caused an industry-wide selloff among the department store stocks today, but Nordstrom and J.C. Penney have the opportunity to bounce back quickly with strong reports tomorrow.
Each company has plenty of potential drivers which might lift results, but Wall Street will be looking for nearly all of these shots to land, so investors will want to keep a close eye on the what and why of each report tomorrow.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>