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Nordstrom (JWN) to Post Q2 Earnings: What's in the Offing?
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Nordstrom, Inc. (JWN - Free Report) is scheduled to release second-quarter fiscal 2021 numbers on Aug 24, after the closing bell. The fashion specialty retailer is likely to have witnessed revenue and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 28 cents per share, which suggests a substantial increase from the year-ago quarter’s reported figure of a loss of $1.62. The consensus mark has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $3.32 billion, indicating a rise of 78.1% from the figure reported in the year-ago quarter.
The company’s earnings lagged the Zacks Consensus Estimate in the last reported quarter. However, it delivered an earnings surprise of 532.7%, on average, in the trailing four quarters.
Nordstrom’s results in the recent quarters reflected a marked recovery from the prior year due to the easing of COVID-related restrictions. It has been gaining from growth across both brands, driven by robust customer demand and strong digital momentum, which is likely to have continued in second-quarter fiscal 2021.
The demand recovery can be attributed to increased vaccinations, lifting of COVID-related restrictions in many markets and government stimulus payments. Accelerated demand trends, owing to the resuming of normal activities, including social events, travel and return-to-office, have also been drivers. This led the company to report the third straight quarter of sequential sales growth in the first quarter of fiscal 2021.
On the last reported quarter’s earnings call, management noted that the sequential top-line growth trend has continued into second-quarter fiscal 2021. Sales growth is expected to reflect gains from overall improved trends, with growth across regions and merchandise categories.
Nordstrom remains focused on advancing in the technology space by boosting e-commerce and digital networks, and improving its supply-chain channels and marketing efforts. The digital business has been witnessing gains from its efforts to unleash the full potential of its digital-first program, which is expected to have boosted digital sales growth in the to-be-reported quarter.
The company’s fiscal second-quarter performance is expected to have benefited from its market strategy and inventory management initiatives. The market strategy helps engage with customers through better service and greater access to products, irrespective of the mode of shopping. Meanwhile, the company has been balancing inventory levels with sales, while managing receipt flows to mitigate potential supply-chain disruptions, which is expected to have aided closing inventory levels in the fiscal second quarter.
However, the company’s sales and earnings performance are still short of the pre-pandemic levels. The pre-pandemic period is a more suitable basis for comparison for retailers as elevated COVID-19 impacts related to temporary store closures hurt industry-wide results throughout 2020.
In the last reported quarter, sales for Nordstrom and Nordstrom Rack brands reflected declines from first-quarter fiscal 2019 mainly as in-store sales volumes did not match the pre-pandemic levels. We expect sales trends to be soft in the to-be-reported quarter versus the fiscal 2019 period.
SG&A expenses, as a percentage of sales, are expected to have increased from second-quarter fiscal 2019 due to higher COVID-related labor and freight costs as well as increased store operating costs as stores have reopened.
What Does the Zacks Model Say
Our proven model does not conclusively predict an earnings beat for Nordstrom this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Nordstrom carries a Zacks Rank #3 but has an Earnings ESP of -10.00%.
Stocks With Favorable Combinations
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
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Nordstrom (JWN) to Post Q2 Earnings: What's in the Offing?
Nordstrom, Inc. (JWN - Free Report) is scheduled to release second-quarter fiscal 2021 numbers on Aug 24, after the closing bell. The fashion specialty retailer is likely to have witnessed revenue and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 28 cents per share, which suggests a substantial increase from the year-ago quarter’s reported figure of a loss of $1.62. The consensus mark has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $3.32 billion, indicating a rise of 78.1% from the figure reported in the year-ago quarter.
The company’s earnings lagged the Zacks Consensus Estimate in the last reported quarter. However, it delivered an earnings surprise of 532.7%, on average, in the trailing four quarters.
Nordstrom, Inc. Price and EPS Surprise
Nordstrom, Inc. price-eps-surprise | Nordstrom, Inc. Quote
Factors to Note
Nordstrom’s results in the recent quarters reflected a marked recovery from the prior year due to the easing of COVID-related restrictions. It has been gaining from growth across both brands, driven by robust customer demand and strong digital momentum, which is likely to have continued in second-quarter fiscal 2021.
The demand recovery can be attributed to increased vaccinations, lifting of COVID-related restrictions in many markets and government stimulus payments. Accelerated demand trends, owing to the resuming of normal activities, including social events, travel and return-to-office, have also been drivers. This led the company to report the third straight quarter of sequential sales growth in the first quarter of fiscal 2021.
On the last reported quarter’s earnings call, management noted that the sequential top-line growth trend has continued into second-quarter fiscal 2021. Sales growth is expected to reflect gains from overall improved trends, with growth across regions and merchandise categories.
Nordstrom remains focused on advancing in the technology space by boosting e-commerce and digital networks, and improving its supply-chain channels and marketing efforts. The digital business has been witnessing gains from its efforts to unleash the full potential of its digital-first program, which is expected to have boosted digital sales growth in the to-be-reported quarter.
The company’s fiscal second-quarter performance is expected to have benefited from its market strategy and inventory management initiatives. The market strategy helps engage with customers through better service and greater access to products, irrespective of the mode of shopping. Meanwhile, the company has been balancing inventory levels with sales, while managing receipt flows to mitigate potential supply-chain disruptions, which is expected to have aided closing inventory levels in the fiscal second quarter.
However, the company’s sales and earnings performance are still short of the pre-pandemic levels. The pre-pandemic period is a more suitable basis for comparison for retailers as elevated COVID-19 impacts related to temporary store closures hurt industry-wide results throughout 2020.
In the last reported quarter, sales for Nordstrom and Nordstrom Rack brands reflected declines from first-quarter fiscal 2019 mainly as in-store sales volumes did not match the pre-pandemic levels. We expect sales trends to be soft in the to-be-reported quarter versus the fiscal 2019 period.
SG&A expenses, as a percentage of sales, are expected to have increased from second-quarter fiscal 2019 due to higher COVID-related labor and freight costs as well as increased store operating costs as stores have reopened.
What Does the Zacks Model Say
Our proven model does not conclusively predict an earnings beat for Nordstrom this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Nordstrom carries a Zacks Rank #3 but has an Earnings ESP of -10.00%.
Stocks With Favorable Combinations
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Gap, Inc. (GPS - Free Report) has an Earnings ESP of +53.66% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Burlington Stores, Inc. (BURL - Free Report) has an Earnings ESP of +17.37% and it flaunts a Zacks Rank #1 at present.
Urban Outfitters, Inc. (URBN - Free Report) currently has an Earnings ESP of +4.00% and a Zacks Rank #2.