Shares of upscale department store operator, Nordstrom Inc. (JWN - Free Report) have been trending up since Feb 2014 and hit a 52-week high of $70.71 on May 16, before eventually closing at $70.55 recording a year-over-year return of 17.8%.
Shares have been gaining momentum since the company posted better-than-expected first-quarter 2014 results. Nordstrom’s earnings of 72 cents per share not only came ahead of its own guidance range of 60–70 cents, but also surpassed the Zacks Consensus Estimate of 67 cents. Following the results, the company’s shares have soared 14.7% to date.
Results were aided by the company’s customer strategy, reflecting growth across channels along with efficient inventory and expense management. Moreover, total revenue jumped 6.6% to $2,931 million, beating the Zacks Consensus Estimate of $2,877 million and its own 3.5–5.5% growth guidance.
The year-over-year increase in revenue was primarily led by strong performance at its stores open for at least one year, new store openings as well as a robust online retail performance. Nordstrom’s focus on store expansion is evident from the series of Rack store openings since the beginning of 2013.
Also, recently the company launched a new mobile app and an online site named nordstromrack.com on its common platform with its wholly owned subsidiary, HauteLook. This seamless mobile and Internet experience will bring together two profitable businesses of the company under a single roof and enrich customers’ experiences by providing them solid offerings at attractive prices.
These moves underscore Nordstrom’s commitment to strengthen the retail network to drive top-line growth. It also highlights the company’s inherent growth prospects and in turn makes investors constructive of the stock.
Nordstrom currently has long-term earnings growth rate expectations of 10.2%. Apart from Nordstrom, The Kroger Co. (KR - Free Report) , Dillard's Inc. (DDS - Free Report) and Mallinckrodt plc (MNK - Free Report) also hit 52-week highs of $47.12, $111.73 and $79.6, respectively on the day.