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The Zacks Analyst Blog Highlights: Nordstrom, Bed Bath & Beyond, Cheesecake Factory, Whole Foods Market and Genomic Health

JWN BBBY CAKE WFM GHDX

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For Immediate Release

Chicago, IL – October 11, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Nordstrom Inc. (JWN - Analyst Report), Bed Bath & Beyond Inc. (BBBY - Analyst Report), The Cheesecake Factory Inc. (CAKE - Analyst Report), Whole Foods Market Inc. (WFM - Analyst Report) and Genomic Health (GHDX - Analyst Report).

 

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Here are highlights from Wednesday’s Analyst Blog:

 

Nordstrom to Open More Rack Stores

 

Leading fashion retailer, Nordstrom Inc. (JWN - Analyst Report) seems to be on an expansion spree, as the company announces its plans to open two more Nordstrom Rack stores, one in Cleveland, Ohio; and the other in downtown Chicago, Illinois.

Nordstrom’s new Rack store towards the west side of Cleveland, positioned at the Promenade in Crocker Park, will be the company’s second Rack store in Cleveland. Enclosing a store space of about 34,000 square feet, the new store will replace the Borders Books space at Crocker Park. A lifestyle center, the Crocker Park, is owned by Stark Enterprises and already houses leading retailers and restaurant chains like Bed Bath & Beyond Inc. (BBBY - Analyst Report), H&M, Trader Joe's, Victoria's Secret and The Cheesecake Factory Inc. (CAKE - Analyst Report).

The company currently operates a full-line store in the Beachwood Place and a Nordstrom Rack at Legacy Village in the east side of Cleveland. The company’s Crocker Park store scheduled to open to public in fall 2013, will be the company’s inaugural store in the west side of Cleveland.

Nordstrom’s second announcement marks the opening of the company’s third Rack store in downtown Chicago, where it already operates stores at the Chicago Avenue and State Street. Located a few miles from these stores, the company’s new two-level Rack store at Collection Anex in Chicago's Lincoln Park neighborhood will be spread over an area of 40,000 square feet. The new store will be located right across the street from Whole Foods Market Inc. (WFM - Analyst Report) and adjoining to The North Avenue Collection, which houses top brands like Banana Republic, J.Crew and Victoria's Secret. Nordstrom’s new Chicago showroom is expected to begin operations in spring 2014.

Additionally, the company has four full-line stores in business in the greater Chicago region including the store on Michigan Avenue.

Nordstrom’s Rack stores generally offer merchandise that are in trend from Nordstrom stores and Nordstrom.com at a significantly reduced price to customers. Products at these stores are sold with discounts of roughly 50% to 60% from the original Nordstrom tags. Nordstrom Rack also carries a vast assortment of branded apparel, accessories and shoes that are available at Nordstrom stores, and are offered to customers at a discount of about 30% to 70%.

Nordstrom’s latest store openings signify the company’s commitment to expand its store network with the aim of driving top-line growth. As of October 9, 2012, Nordstrom operated 117 Nordstrom full-line stores, 116 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure&bond store and 1 clearance store, thus bringing the total store count to 237.

Moreover, the company has targeted to open 16 new stores in fiscal 2012 consisting of 1 full-line store and 15 Nordstrom Rack Stores. Additionally, the company has planned to add 24 new Rack stores in fiscal 2013 and intends to operate 230 Rack stores by the end of 2016.

Nordstrom currently maintains a Zacks #2 Rank, which translates into a short-term Buy rating. However, our long-term recommendation on the stock remains Neutral.

 

 

 

Genomic Health: Strong Buy

 

Consistent uptrend in Oncotype sales, pipeline development, strategic investments and impressive second quarter performance have helped Genomic Health (GHDX - Analyst Report), a global cancer company, to achieve a Zacks #1 Rank (Strong Buy) on October 09, 2012. Moreover, this company has delivered positive earnings surprises in four out of the last five quarters with an average beat in triple digits.  

With a strong one-year return of 50.9%, a robust portfolio and a history of beating quarterly earnings estimates, this stock offers an attractive investment opportunity.

Rank Driver

Strong Oncotype growth, focus on international expansion, several recent strategic initiatives, and attractive growth opportunities in the field of cancer diagnosis enabling physicians to make individualized treatment decisions  are the primary rank drivers for this stock.

In August 2012, Genomic Health reported a strong second quarter 2012 result with earnings per share (EPS) of 6 cents, way above the Zacks Consensus Estimate of a loss of 2 cents. Although total revenues of $57.6 million nominally missed the Zacks Consensus Estimate of $58 million, it displayed a robust 13% year over year growth on the back of strong sales in Oncotype DX breast cancer test. Based on a solid quarter, the company increased its full year consolidated net income outlook to $4–$7 million, an improvement from the previous guidance of break-even or net loss of $3 million.

Genomic Health’s flagship product, the 21-gene Oncotype DX breast cancer test has been recording strong growth over the past several quarters. The company also diversified its offering with the launch of the Oncotype DX DCIS Score at the end of 2011 and expects to deliver 75,000−77,000 tests in 2012.

 

 

 

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