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Here's How Nordstrom (JWN) is Poised Just Before Q3 Earnings
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Nordstrom, Inc. (JWN - Free Report) is scheduled to release third-quarter fiscal 2022 numbers on Nov 22, after the closing bell. The fashion specialty retailer is expected to have witnessed revenue and earnings declines in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 13 cents per share, suggesting a 66.7% decline from the year-ago quarter's reported figure. The consensus mark for earnings has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $3.51 billion, indicating a decrease of 3.6% from the figure reported in the year-ago quarter.
We expect the company’s fiscal third-quarter total revenues to decline 3.4% year over year to $3,511.6 million and the bottom line to fall 66.7% to 13 cents per share.
In the last reported quarter, the company posted an earnings surprise of 1.25%. Also, it delivered an earnings surprise of 3.5%, on average, in the trailing four quarters.
Nordstrom has been gaining from positive pricing and broad-based growth across core categories and regions. Robust digital growth and compelling merchandise have also been drivers. Core categories, including men's and women's apparel, shoes, and designer, have been performing well. The persistence of these trends is likely to get reflected in the company’s fiscal third-quarter results.
The company has been on track to enhance the performance of Nordstrom Rack and improve inventory. It has been progressing well with its More Reasons to Rack campaign, which is likely to have increased brand awareness and boosted traffic in the to-be-reported quarter.
Nordstrom has been focused on technology advancement by boosting e-commerce and digital networks, improving its supply-chain channels, and marketing efforts. The digital business has been witnessing gains from improved digital traffic across both Nordstrom and Nordstrom Rack, as well as increased utilization of Buy Online, Pick Up In-Store service. Its mobile app has also been performing well. Alongside these, the integration of Rack.com into Nordstrom.com should have contributed to the company's top line in the to-be-reported quarter.
The company's fiscal third-quarter performance is expected to have benefited from its market strategy, which helps engage with customers through better service and greater access to products, irrespective of the shopping mode. As part of the strategy, Nordstrom expanded services, including order pickup and ship-to-store, to all Nordstrom Rack stores.
Higher sales and reduced buying and occupancy costs are likely to have boosted margins in the to-be-reported quarter. Also, gross margin improvement and SG&A leverage, stemming from higher sales, are likely to have aided the adjusted EBIT margin.
However, Nordstrom has been witnessing sluggish demand due to rising inflation. The company's fiscal third-quarter sales and earnings performances are expected to have been impacted by declining discretionary spending stemming from inflation.
On the last reported quarter’s earnings call, the company expected the competitive promotional environment in retail to continue in the second half of fiscal 2022. As a result, it has been making efforts to clear excess inventory. The move is likely to have hut margins to some extent in the fiscal third quarter.
Management anticipated a mid-single-digit decline in revenues for the fiscal third quarter, as evident from the demand deceleration seen in the latter part of the second quarter. Also, the EBIT margin is likely to be down 200 bps year over year. Our model estimates a 200-bps decline in the fiscal third-quarter EBIT margin to 1.5%, in line with the company’s guidance.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Nordstrom this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances 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 has an Earnings ESP of +1.02% and a Zacks Rank #4.
Stocks With Favorable Combination
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:
Macy's (M - Free Report) currently has an Earnings ESP of +18.92% and a Zacks Rank of 2. The company is likely to register decreases in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for M’s quarterly earnings has moved up by a penny in the past 30 days to 19 cents per share. However, the consensus estimate suggests an 84.6% decline from the year-ago quarter’s reported number.
Macy’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.17 billion, which suggests a rise of 4.9% from the figure reported in the prior-year quarter.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +8.48% and a Zacks Rank of 3. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days to 52 cents per share. The consensus estimate suggests a 61.8% decline from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.1 billion, which suggests a decline of 10.9% from the figure reported in the prior-year quarter.
DICK'S Sporting Goods (DKS - Free Report) currently has an Earnings ESP of +17.23% and a Zacks Rank of 3. The company is likely to register top and bottom-line declines when it reports third-quarter fiscal 2022 results. The consensus mark for DKS’ quarterly revenues is pegged at $2.7 billion, which suggests a decline of 1.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for DICK'S Sporting’s earnings has moved up 1.4% to $2.24 per share in the past 30 days. The consensus estimate indicates a 29.8% decline from the year-ago quarter.
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Here's How Nordstrom (JWN) is Poised Just Before Q3 Earnings
Nordstrom, Inc. (JWN - Free Report) is scheduled to release third-quarter fiscal 2022 numbers on Nov 22, after the closing bell. The fashion specialty retailer is expected to have witnessed revenue and earnings declines in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 13 cents per share, suggesting a 66.7% decline from the year-ago quarter's reported figure. The consensus mark for earnings has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $3.51 billion, indicating a decrease of 3.6% from the figure reported in the year-ago quarter.
We expect the company’s fiscal third-quarter total revenues to decline 3.4% year over year to $3,511.6 million and the bottom line to fall 66.7% to 13 cents per share.
In the last reported quarter, the company posted an earnings surprise of 1.25%. Also, it delivered an earnings surprise of 3.5%, on average, in the trailing four quarters.
Nordstrom, Inc. Price and EPS Surprise
Nordstrom, Inc. price-eps-surprise | Nordstrom, Inc. Quote
Key Factors to Note
Nordstrom has been gaining from positive pricing and broad-based growth across core categories and regions. Robust digital growth and compelling merchandise have also been drivers. Core categories, including men's and women's apparel, shoes, and designer, have been performing well. The persistence of these trends is likely to get reflected in the company’s fiscal third-quarter results.
The company has been on track to enhance the performance of Nordstrom Rack and improve inventory. It has been progressing well with its More Reasons to Rack campaign, which is likely to have increased brand awareness and boosted traffic in the to-be-reported quarter.
Nordstrom has been focused on technology advancement by boosting e-commerce and digital networks, improving its supply-chain channels, and marketing efforts. The digital business has been witnessing gains from improved digital traffic across both Nordstrom and Nordstrom Rack, as well as increased utilization of Buy Online, Pick Up In-Store service. Its mobile app has also been performing well. Alongside these, the integration of Rack.com into Nordstrom.com should have contributed to the company's top line in the to-be-reported quarter.
The company's fiscal third-quarter performance is expected to have benefited from its market strategy, which helps engage with customers through better service and greater access to products, irrespective of the shopping mode. As part of the strategy, Nordstrom expanded services, including order pickup and ship-to-store, to all Nordstrom Rack stores.
Higher sales and reduced buying and occupancy costs are likely to have boosted margins in the to-be-reported quarter. Also, gross margin improvement and SG&A leverage, stemming from higher sales, are likely to have aided the adjusted EBIT margin.
However, Nordstrom has been witnessing sluggish demand due to rising inflation. The company's fiscal third-quarter sales and earnings performances are expected to have been impacted by declining discretionary spending stemming from inflation.
On the last reported quarter’s earnings call, the company expected the competitive promotional environment in retail to continue in the second half of fiscal 2022. As a result, it has been making efforts to clear excess inventory. The move is likely to have hut margins to some extent in the fiscal third quarter.
Management anticipated a mid-single-digit decline in revenues for the fiscal third quarter, as evident from the demand deceleration seen in the latter part of the second quarter. Also, the EBIT margin is likely to be down 200 bps year over year. Our model estimates a 200-bps decline in the fiscal third-quarter EBIT margin to 1.5%, in line with the company’s guidance.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Nordstrom this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances 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 has an Earnings ESP of +1.02% and a Zacks Rank #4.
Stocks With Favorable Combination
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:
Macy's (M - Free Report) currently has an Earnings ESP of +18.92% and a Zacks Rank of 2. The company is likely to register decreases in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for M’s quarterly earnings has moved up by a penny in the past 30 days to 19 cents per share. However, the consensus estimate suggests an 84.6% decline from the year-ago quarter’s reported number.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Macy’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.17 billion, which suggests a rise of 4.9% from the figure reported in the prior-year quarter.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +8.48% and a Zacks Rank of 3. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days to 52 cents per share. The consensus estimate suggests a 61.8% decline from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.1 billion, which suggests a decline of 10.9% from the figure reported in the prior-year quarter.
DICK'S Sporting Goods (DKS - Free Report) currently has an Earnings ESP of +17.23% and a Zacks Rank of 3. The company is likely to register top and bottom-line declines when it reports third-quarter fiscal 2022 results. The consensus mark for DKS’ quarterly revenues is pegged at $2.7 billion, which suggests a decline of 1.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for DICK'S Sporting’s earnings has moved up 1.4% to $2.24 per share in the past 30 days. The consensus estimate indicates a 29.8% decline from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.