As the coronavirus pandemic has taken online shopping to another level, big consumer brands have been going all the way to make the most of the digital boom by offering large scale and seamless supply-chain management amid this crisis. As a result, contactless technologies, new go-to-market models, live video streaming to demonstrate products and services, etc. have come into place, stemming from continued consciousness about health and safety. Clearly, the digital trend is likely to prevail in the near future, and
Nordstrom, Inc. ( JWN Quick Quote JWN - Free Report) is one such company gaining from the coronavirus accelerated digital trend. Notably, positive customer demand during the company’s anniversary sale led to online sales growth of 37% in third-quarter fiscal 2020, representing 54% of overall sales. During the event, digital sales accounted for 60% of sales. Excluding the Anniversary Sale event shift impact, digital sales increased in mid-teens in the fiscal third quarter. Going ahead, Nordstrom remains focused on boosting e-commerce and digital networks alongside improving its supply-chain channels and marketing efforts. In this context, management introduced pick-up options for Nordstrom.com, Nordstromrack.com and HauteLook.com orders from all Nordstrom and Nordstrom Rack stores across the United States. Other retailers witnessing robust digital sales growth for the past few months are American Eagle Outfitters ( AEO Quick Quote AEO - Free Report) , PVH Corp. ( PVH Quick Quote PVH - Free Report) and DICK'S Sporting Goods ( DKS Quick Quote DKS - Free Report) . Although in-store revenues for American Eagle fell 16% in the fiscal third quarter, digital sales rose 29%. While PVH Corp.’s sales declined 18% in third-quarter fiscal 2020, digital sales grew 36% year over year. Also, e-commerce sales for DICK'S Sporting skyrocketed 95% year over year in third-quarter fiscal 2020. What Else You Need to Know?
Nordstrom is on track with its cost-restructuring actions that will help it stay afloat amid the coronavirus pandemic. The company is tracking ahead of the target of $750 million in annual cash savings for 2020, net of COVID-related charges, driven by strong execution of its plans to create a leaner and more efficient organization. Notably, it has generated $550 million of cash savings year to date.
Improved merchandise margins, overhead cost reductions and positive customer demand during its anniversary sale led to an earnings beat in third-quarter fiscal 2020. The company expects to sustain the strong momentum in fourth-quarter fiscal 2020 and beyond. Moreover, it is optimistic about its on-trend inventory levels. That being said, Nordstrom has been reeling under soft store traffic due to the pandemic. Management foresees sales to decline in the low twenties for the fiscal fourth quarter. Moreover, rising COVID-related costs and higher promotions are concerns. Nonetheless, on its third-quarter earnings call, management had stated that based on anticipations of stores remaining operational, it foresees positive EBIT and solid cash flow for the fourth quarter. Markedly, this Zacks Rank #3 (Hold) stock has surged 92.6% in the past three months, outperforming the industry’s growth of 55.1%. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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