Nordstrom Revisits Salt Lake City

Recently, Nordstrom Inc. (JWN - Analyst Report), a leading fashion specialty retailer in the United States, announced the opening of a new store in Salt Lake City, Utah. The company through its latest store will offer high quality apparel, shoes, cosmetics and accessories for men, women and kids.

The new 125,000 square foot showroom will offer both branded and private label merchandises. Residents of the region will have the benefit of buying designer apparel from renowned brands like Dries Van Noten, Burberry Prorsum, Michael Kors and Jason Wu. Further, the store will feature classic beauty brands designed by Giorgio Armani, Bobbi Brown, Kate Somerville and more.

The new store marks the company’s return to the region after 15 years. The company opened its first store in the region in 1980, while closing the same in the year 2007.

Earlier, the company announced a new $800 million share repurchase authorization while hiking its quarterly dividend. The company plans to fund the newly announced share buybacks by using the available cash in hand. Nordstrom also increased its quarterly dividend to 27 cents per share, bringing the company’s annualized dividend payout to $1.08 per share.

Nordstrom operates in a highly fragmented specialty retail sector and faces intense competition from other well-established players, such as The Gap Inc. (GPS - Analyst Report) and Limited Brands Inc. (LTD - Analyst Report). The company primarily competes on the basis of fashion, quality and service.

Nordstrom remains focused on expanding its store network to drive top-line growth. However, a sluggish discretionary spending environment, intense competition and exposure to seasonal fluctuations will keep us on the sidelines.

Nordstrom's shares maintain a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Our long-term recommendation on the stock remains ‘Neutral’.