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Factors to Decide the Fate of Nordstrom (JWN) in Q4 Earnings
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Nordstrom, Inc. (JWN - Free Report) is scheduled to release fourth-quarter fiscal 2022 numbers on Mar 2, 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 fourth-quarter earnings is pegged at 65 cents per share, suggesting a 47.2% 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 $4.33 billion, indicating a decrease of 3.6% from the figure reported in the year-ago quarter.
In the last reported quarter, the company posted an earnings surprise of 42.9%. Also, it delivered an earnings surprise of 21.9%, on average, in the trailing four quarters.
Nordstrom’s fourth-quarter fiscal 2022 results are expected to reflect the significant impacts of a dismal holiday season. Last month, the company reported soft holiday results, wherein sales declined 3.5% year over year in the nine-week period ended Dec 31, 2022. Banner-wise, Nordstrom sales fell 1.7% and sales at Nordstrom Rack decreased 7.6%.
The decline was mainly due to high promotions and sluggish sales than the pre-pandemic levels. Reduced consumer spending, stemming from the tough macroeconomic environment, acted as a headwind. The company has been gaining from positive pricing and broad-based growth across core categories and regions.
In order to end fiscal 2022 with healthy inventory levels, Nordstrom undertook additional markdowns. As a result, it expects year-end inventory levels to decline in the double-digits year over year at the end of fiscal 2022.
Driven by the soft holiday season performance, management lowered its fiscal 2022 guidance. The company anticipates revenue growth, including retail sales and credit card revenues, at the lower end of the prior mentioned 5-7%. The EBIT margin is expected to be 2.8-3.1%, which indicates lower-than-expected gross margins due to additional markdowns. The adjusted EBIT margin is forecast to be 3.1-3.3%. SG&A expenses are expected to reflect gains from the company's supply-chain optimization initiatives and ongoing cost-saving efforts.
Adjusted earnings are likely to be $1.5-$1.7 per share, with reported EPS of $1.33-$1.53. The tax rate is expected to be 17%. Meanwhile, the leverage ratio is likely to be slightly above 3.0 times by the year end compared with the prior view of below 2.9 times.
However, the company is committed to enhancing customer experience via its Closer to You strategy, optimized supply chain and better efficiency. These endeavors are expected to have slightly offset the aforementioned declines.
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 is anticipated to have contributed to the company's top line in the to-be-reported quarter.
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 -2.22% and a Zacks Rank #5.
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:
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +2.90% and a Zacks Rank of 2. The company is likely to register growth in the bottom line when it reports fourth-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days at $2.72 per share. The consensus estimate suggests 7.5% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.6 billion, which suggests a decline of 0.3% from the figure reported in the prior-year quarter.
Foot Locker (FL - Free Report) currently has an Earnings ESP of +3.03% and a Zacks Rank of 2. The company is likely to register top and bottom-line declines when it reports fourth-quarter fiscal 2022 results. The consensus mark for FL’s quarterly revenues is pegged at $2.2 billion, which suggests a decline of 8.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Foot Locker’s earnings has been unchanged at 51 cents per share in the past 30 days. The consensus estimate indicates a 69.5% decline from the year-ago quarter’s reported figure.
Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +8.53% and a Zacks Rank of 2. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter fiscal 2022 results. The consensus mark for ULTA’s quarterly revenues is pegged at $3.01 billion, which suggests 10.3% growth from the figure reported in the prior-year quarter.
The consensus mark for ULTA’s quarterly earnings has moved up 0.9% in the past 30 days to $5.53 per share. The consensus estimate suggests growth of 2.2% from the year-ago quarter’s reported figure.
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Factors to Decide the Fate of Nordstrom (JWN) in Q4 Earnings
Nordstrom, Inc. (JWN - Free Report) is scheduled to release fourth-quarter fiscal 2022 numbers on Mar 2, 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 fourth-quarter earnings is pegged at 65 cents per share, suggesting a 47.2% 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 $4.33 billion, indicating a decrease of 3.6% from the figure reported in the year-ago quarter.
In the last reported quarter, the company posted an earnings surprise of 42.9%. Also, it delivered an earnings surprise of 21.9%, 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’s fourth-quarter fiscal 2022 results are expected to reflect the significant impacts of a dismal holiday season. Last month, the company reported soft holiday results, wherein sales declined 3.5% year over year in the nine-week period ended Dec 31, 2022. Banner-wise, Nordstrom sales fell 1.7% and sales at Nordstrom Rack decreased 7.6%.
The decline was mainly due to high promotions and sluggish sales than the pre-pandemic levels. Reduced consumer spending, stemming from the tough macroeconomic environment, acted as a headwind. The company has been gaining from positive pricing and broad-based growth across core categories and regions.
In order to end fiscal 2022 with healthy inventory levels, Nordstrom undertook additional markdowns. As a result, it expects year-end inventory levels to decline in the double-digits year over year at the end of fiscal 2022.
Driven by the soft holiday season performance, management lowered its fiscal 2022 guidance. The company anticipates revenue growth, including retail sales and credit card revenues, at the lower end of the prior mentioned 5-7%. The EBIT margin is expected to be 2.8-3.1%, which indicates lower-than-expected gross margins due to additional markdowns. The adjusted EBIT margin is forecast to be 3.1-3.3%. SG&A expenses are expected to reflect gains from the company's supply-chain optimization initiatives and ongoing cost-saving efforts.
Adjusted earnings are likely to be $1.5-$1.7 per share, with reported EPS of $1.33-$1.53. The tax rate is expected to be 17%. Meanwhile, the leverage ratio is likely to be slightly above 3.0 times by the year end compared with the prior view of below 2.9 times.
However, the company is committed to enhancing customer experience via its Closer to You strategy, optimized supply chain and better efficiency. These endeavors are expected to have slightly offset the aforementioned declines.
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 is anticipated to have contributed to the company's top line in the to-be-reported quarter.
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 -2.22% and a Zacks Rank #5.
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:
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +2.90% and a Zacks Rank of 2. The company is likely to register growth in the bottom line when it reports fourth-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days at $2.72 per share. The consensus estimate suggests 7.5% growth from the year-ago quarter’s reported number.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.6 billion, which suggests a decline of 0.3% from the figure reported in the prior-year quarter.
Foot Locker (FL - Free Report) currently has an Earnings ESP of +3.03% and a Zacks Rank of 2. The company is likely to register top and bottom-line declines when it reports fourth-quarter fiscal 2022 results. The consensus mark for FL’s quarterly revenues is pegged at $2.2 billion, which suggests a decline of 8.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Foot Locker’s earnings has been unchanged at 51 cents per share in the past 30 days. The consensus estimate indicates a 69.5% decline from the year-ago quarter’s reported figure.
Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +8.53% and a Zacks Rank of 2. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter fiscal 2022 results. The consensus mark for ULTA’s quarterly revenues is pegged at $3.01 billion, which suggests 10.3% growth from the figure reported in the prior-year quarter.
The consensus mark for ULTA’s quarterly earnings has moved up 0.9% in the past 30 days to $5.53 per share. The consensus estimate suggests growth of 2.2% from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.