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Headquartered in Seattle, Nordstrom Inc. (JWN - Free Report) is a leading fashion specialty retailer in the United States. The company offers an extensive selection of both branded and private-label merchandise, which are positioned in the upscale segment of the industry through its Nordstrom branded full-line stores; Nordstrom Rack stores; clearance stores under the Last Chance name; Trunk Club clubhouses; and Nordstrom Local.
Shares Skyrocket 38% After Q4 Earnings
Net sales climbed 23% year-over-year to $4.5 billion, and decreased just 1% compared to Q4 2019, showing investors that its top line has now almost completely recovered from the coronavirus pandemic.
Sales also rebounded 23% at Nordstrom Rack during the quarter. The retailer’s discount segment has been under a lot of pressure because of the supply chain crisis, which led to struggles to obtain enough inventory.
Digital sales fell a slight 1% year-over-year, but represented 44% of total sales during the all-important holiday quarter, as well as 42% of sales for the full fiscal year.
Notably, sales in Nordstrom’s home, active, designer, beauty, and kids categories showed the strongest growth compared with the fourth quarter of 2019, while its Southern Markets, including Southern California, was its best performing region.
Gross margin improved by five percentage points to 38%, driven partially by lower promotional activity. This resulted in an increase in operating income to $299 million and a sixfold rise in net earnings to $200 million, or $1.23 per share. JWN’s bottom line easily beat analyst expectations of $1.02 per share.
Is This the Beginning of a JWN Rebound?
Year-to-date, shares of Nordstrom are up about 6% compared to the S&P 500’s 10.6% decline. Earnings estimates have been rising, and JWN is a Zacks Rank #1 (Strong Buy) right now.
Last quarter’s strong results prompted management to issue a very upbeat outlook for 2022. Nordstrom now expects revenue in the range of 5% to 7%; operating margin between 5.6% and 6%; and earnings between $3.15 and $3.50 per share.
Zacks’ estimates are in-line with the company’s guidance ranges. Five analysts revised their bottom-line estimate upwards in the last 60 days for the year, and the Zacks Consensus Estimate has jumped $1.26 to $3.30 per share. Earnings are expected to grow 200% compared to 2021, and sales could see growth of 5.7% to $15.6 billion for the year.
Looking ahead, it’s clear that Nordstrom has some great opportunities to improve all facets of its business, and its rebound will likely be buoyed by easing supply constraints and the reopening of offices near some of the retailer’s main flagship locations (Seattle, San Francisco, New York, Chicago, Toronto, and Vancouver).
The company also hopes to begin returning capital to shareholders in the first quarter, potentially in the form of dividend payments.
All of these factors, plus JWN’s enticing 7.3X 12-month price-to-earnings ratio, could mean the stock is ripe for a rebound.If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep JWN on your shortlist.
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Bull of the Day: Nordstrom (JWN)
Headquartered in Seattle, Nordstrom Inc. (JWN - Free Report) is a leading fashion specialty retailer in the United States. The company offers an extensive selection of both branded and private-label merchandise, which are positioned in the upscale segment of the industry through its Nordstrom branded full-line stores; Nordstrom Rack stores; clearance stores under the Last Chance name; Trunk Club clubhouses; and Nordstrom Local.
Shares Skyrocket 38% After Q4 Earnings
Net sales climbed 23% year-over-year to $4.5 billion, and decreased just 1% compared to Q4 2019, showing investors that its top line has now almost completely recovered from the coronavirus pandemic.
Sales also rebounded 23% at Nordstrom Rack during the quarter. The retailer’s discount segment has been under a lot of pressure because of the supply chain crisis, which led to struggles to obtain enough inventory.
Digital sales fell a slight 1% year-over-year, but represented 44% of total sales during the all-important holiday quarter, as well as 42% of sales for the full fiscal year.
Notably, sales in Nordstrom’s home, active, designer, beauty, and kids categories showed the strongest growth compared with the fourth quarter of 2019, while its Southern Markets, including Southern California, was its best performing region.
Gross margin improved by five percentage points to 38%, driven partially by lower promotional activity. This resulted in an increase in operating income to $299 million and a sixfold rise in net earnings to $200 million, or $1.23 per share. JWN’s bottom line easily beat analyst expectations of $1.02 per share.
Is This the Beginning of a JWN Rebound?
Year-to-date, shares of Nordstrom are up about 6% compared to the S&P 500’s 10.6% decline. Earnings estimates have been rising, and JWN is a Zacks Rank #1 (Strong Buy) right now.
Last quarter’s strong results prompted management to issue a very upbeat outlook for 2022. Nordstrom now expects revenue in the range of 5% to 7%; operating margin between 5.6% and 6%; and earnings between $3.15 and $3.50 per share.
Zacks’ estimates are in-line with the company’s guidance ranges. Five analysts revised their bottom-line estimate upwards in the last 60 days for the year, and the Zacks Consensus Estimate has jumped $1.26 to $3.30 per share. Earnings are expected to grow 200% compared to 2021, and sales could see growth of 5.7% to $15.6 billion for the year.
Looking ahead, it’s clear that Nordstrom has some great opportunities to improve all facets of its business, and its rebound will likely be buoyed by easing supply constraints and the reopening of offices near some of the retailer’s main flagship locations (Seattle, San Francisco, New York, Chicago, Toronto, and Vancouver).
The company also hopes to begin returning capital to shareholders in the first quarter, potentially in the form of dividend payments.
All of these factors, plus JWN’s enticing 7.3X 12-month price-to-earnings ratio, could mean the stock is ripe for a rebound.If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep JWN on your shortlist.