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Is JWN Stock a Buy, Hold or Sell Post Holiday Sales Results?
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Seattle-based fashion retailer, Nordstrom, Inc. (JWN - Free Report) , released its fiscal 2024 holiday sales results on Jan. 13, 2025, reigniting discussions about the stock’s prospects. Investors are confronted with an important question: Should they increase their investment, hold their current position or sell their shares?
The holiday sales performance for Nordstrom demonstrates that the company is progressing on its three key priorities: driving Nordstrom banner growth, optimizing operations and boosting momentum at the Rack. By focusing on faster delivery and efficient inventory management, Nordstrom has enhanced customer experience and productivity.
Nordstrom Holiday Performance: Key Takeaways
Nordstrom reported total company net sales increase of 4.9% and a comparable sales increase of 5.8% for the nine-week holiday period ending Jan. 4, 2025, compared with the nine weeks ended Dec. 30, 2023. The robust holiday results exceeded the company's cautious expectations, driven by increased consumer engagement and successful sales strategies during the critical holiday season.
For the Nordstrom banner, net sales grew 3.7%, while comparable sales rose 6.5%, driven by strong customer demand. The Nordstrom Rack banner showed even stronger performance, with a 7.4% increase in net sales and 4.3% growth in comparable sales, highlighting solid results in the off-price segment.
The Nordstrom Rack banner showed even stronger performance, with a 7.4% increase in net sales and 4.3% growth in comparable sales, highlighting solid results in the off-price segment. However, CEO Erik Nordstrom attributed the stronger-than-expected holiday sales to the company's competitive promotional strategies and the strength of its offerings, which outperformed prior expectations.
JWN’s Raised Q4 View
Nordstrom is strengthening its digital capabilities to drive growth and enhance customer engagement. The company continues leveraging technology to streamline operations, improve inventory management and offer seamless shopping experiences. Also, Nordstrom remains focused on its long-term strategy, which builds on its market strategy to capitalize on its digital-first platform to better serve customers, gain market share and deliver profitable growth.
Based on the robust holiday performance, JWN has raised its full-year sales outlook for fiscal 2024 following stronger-than-anticipated holiday shopping performance across its stores and online platforms. For fiscal 2024, JWN anticipates revenue growth, including retail sales and credit card revenues, of 1.5% to 2.5% compared with fiscal 2023. Notably, the prior year's results included an additional 53rd week. The company expects the absence of the 53rd week this year to hurt the top line by 135 basis points.
For fiscal 2024, the company now expects comparable sales (comps) growth of 2.5-3.5% versus the 52 weeks in fiscal 2023. This compares favorably with its prior outlook of 1% to 2% comps growth. Our model predicts net sales for the Nordstrom banner to decline 0.9% year over year in fiscal 2024, while sales for Nordstrom Rack are expected to increase 7.6%.
Here's How Estimates Stack Up for JWN Stock
The positive sentiment surrounding Nordstrom is reflected in the upward revisions of the Zacks Consensus Estimate for earnings per share. In the past seven days, analysts have increased their estimates for the current quarter, resulting in an upward revision of 2 cents to $1.97 per share. The consensus estimate for earnings for the next quarter has also advanced by 2 cents to $2.00 per share.
The Zacks Consensus Estimate for the current and next quarter’s sales is pegged at $14.96 billion and $15.14 billion, respectively, implying year-over-year growth of 1.8% and 1.2%.
A key driver of growth, Nordstrom Rack has demonstrated solid improvements, driven by strategic efforts to increase brand penetration and better align offerings with customer demand. These initiatives have bolstered the off-price segment, contributing significantly to overall company growth.
With ongoing investments in supply chain optimization and inventory efficiency, Nordstrom remains confident in its ability to deliver profitable growth, creating long-term value for its shareholders while strengthening its position in the competitive retail landscape.
The closer-to-you approach integrates stores and services to expedite deliveries, expand online offerings and improve Rack’s value proposition. The company targets low single-digit annual revenue growth, operating income growth outpacing revenues, an EBIT margin above 6% and annual operating cash flow exceeding $1 billion, with capital expenditure at 3-4% of sales.
Apart from the above positives, growth was also driven by expanded assortments, improved search tools and high in-stock availability, despite a 100-basis-point impact from the Anniversary Sale timing shift. Key initiatives like faster delivery, personalized services and the adoption of generative AI solutions are central to Nordstrom’s digital transformation, aiming to streamline operations and enhance customer engagement.
JWN Stock’s Valuation & Price Performance
JWN emerges as an attractive value opportunity in the Retail - Apparel and Shoes industry, trading at a forward 12-month price-to-earnings ratio of 12.09, below the industry average of 19.20 and the Retail-Wholesale average of 25.21. The stock is undervalued compared with its industry peers, offering compelling value to investors looking for exposure to the Retail-Wholesale sector.
JWN Looks Attractive From a Valuation Standpoint
Image Source: Zacks Investment Research
Nordstrom's stock has experienced a 14.7% increase over the six months, compared with the industry’s growth of 29.5%. The company also outperformed the S&P 500 index’s growth of 12.8% in the same time frame.
JWN Stock’s Six-Month Performance
Image Source: Zacks Investment Research
Final Thoughts on Nordstrom Stock
Investors may consider JWN stock as a compelling opportunity driven by its strategic initiatives that support long-term growth. The upward revision in earnings estimates and attractive stock valuation enhance the appeal for investors, positioning JWN to deliver solid returns. The company currently has a Zacks Rank #2 (Buy).
Three Picks You Can’t Miss
We have highlighted three other top-ranked stocks in the broader sector, namely Deckers Outdoor (DECK - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and The Gap, Inc. (GAP - Free Report) .
Deckers, a footwear and accessories dealer, currently sports a Zacks Rank #1 (Strong Buy). DECK delivered an earnings surprise of 41.1% in the trailing four quarters, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Deckers’ fiscal 2024 sales and earnings indicates growth of 14.1% and 14.4%, respectively, from the year-ago reported figures.
Abercrombie, a leading casual apparel retailer, currently sports a Zacks Rank of 1. Abercrombie has a trailing four-quarter earnings surprise of 14.8%, on average.
The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and earnings indicates growth of 15.1% and 69.3%, respectively, from the year-ago reported figures.
Gap operates as an apparel retail company, which offers apparel, accessories and personal care products for men, women and children. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Gap’s fiscal 2024 sales and earnings indicates growth of 0.8% and 41.3%, respectively, from the year-ago quarter’s reported numbers. GAP has a trailing four-quarter earnings surprise of 101.2%, on average.
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Is JWN Stock a Buy, Hold or Sell Post Holiday Sales Results?
Seattle-based fashion retailer, Nordstrom, Inc. (JWN - Free Report) , released its fiscal 2024 holiday sales results on Jan. 13, 2025, reigniting discussions about the stock’s prospects. Investors are confronted with an important question: Should they increase their investment, hold their current position or sell their shares?
The holiday sales performance for Nordstrom demonstrates that the company is progressing on its three key priorities: driving Nordstrom banner growth, optimizing operations and boosting momentum at the Rack. By focusing on faster delivery and efficient inventory management, Nordstrom has enhanced customer experience and productivity.
Nordstrom Holiday Performance: Key Takeaways
Nordstrom reported total company net sales increase of 4.9% and a comparable sales increase of 5.8% for the nine-week holiday period ending Jan. 4, 2025, compared with the nine weeks ended Dec. 30, 2023. The robust holiday results exceeded the company's cautious expectations, driven by increased consumer engagement and successful sales strategies during the critical holiday season.
For the Nordstrom banner, net sales grew 3.7%, while comparable sales rose 6.5%, driven by strong customer demand. The Nordstrom Rack banner showed even stronger performance, with a 7.4% increase in net sales and 4.3% growth in comparable sales, highlighting solid results in the off-price segment.
The Nordstrom Rack banner showed even stronger performance, with a 7.4% increase in net sales and 4.3% growth in comparable sales, highlighting solid results in the off-price segment. However, CEO Erik Nordstrom attributed the stronger-than-expected holiday sales to the company's competitive promotional strategies and the strength of its offerings, which outperformed prior expectations.
JWN’s Raised Q4 View
Nordstrom is strengthening its digital capabilities to drive growth and enhance customer engagement. The company continues leveraging technology to streamline operations, improve inventory management and offer seamless shopping experiences. Also, Nordstrom remains focused on its long-term strategy, which builds on its market strategy to capitalize on its digital-first platform to better serve customers, gain market share and deliver profitable growth.
Based on the robust holiday performance, JWN has raised its full-year sales outlook for fiscal 2024 following stronger-than-anticipated holiday shopping performance across its stores and online platforms. For fiscal 2024, JWN anticipates revenue growth, including retail sales and credit card revenues, of 1.5% to 2.5% compared with fiscal 2023. Notably, the prior year's results included an additional 53rd week. The company expects the absence of the 53rd week this year to hurt the top line by 135 basis points.
For fiscal 2024, the company now expects comparable sales (comps) growth of 2.5-3.5% versus the 52 weeks in fiscal 2023. This compares favorably with its prior outlook of 1% to 2% comps growth. Our model predicts net sales for the Nordstrom banner to decline 0.9% year over year in fiscal 2024, while sales for Nordstrom Rack are expected to increase 7.6%.
Here's How Estimates Stack Up for JWN Stock
The positive sentiment surrounding Nordstrom is reflected in the upward revisions of the Zacks Consensus Estimate for earnings per share. In the past seven days, analysts have increased their estimates for the current quarter, resulting in an upward revision of 2 cents to $1.97 per share. The consensus estimate for earnings for the next quarter has also advanced by 2 cents to $2.00 per share.
The Zacks Consensus Estimate for the current and next quarter’s sales is pegged at $14.96 billion and $15.14 billion, respectively, implying year-over-year growth of 1.8% and 1.2%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Image Source: Zacks Investment Research
Growth Drivers Behind Nordstrom’s Success
A key driver of growth, Nordstrom Rack has demonstrated solid improvements, driven by strategic efforts to increase brand penetration and better align offerings with customer demand. These initiatives have bolstered the off-price segment, contributing significantly to overall company growth.
With ongoing investments in supply chain optimization and inventory efficiency, Nordstrom remains confident in its ability to deliver profitable growth, creating long-term value for its shareholders while strengthening its position in the competitive retail landscape.
The closer-to-you approach integrates stores and services to expedite deliveries, expand online offerings and improve Rack’s value proposition. The company targets low single-digit annual revenue growth, operating income growth outpacing revenues, an EBIT margin above 6% and annual operating cash flow exceeding $1 billion, with capital expenditure at 3-4% of sales.
Apart from the above positives, growth was also driven by expanded assortments, improved search tools and high in-stock availability, despite a 100-basis-point impact from the Anniversary Sale timing shift. Key initiatives like faster delivery, personalized services and the adoption of generative AI solutions are central to Nordstrom’s digital transformation, aiming to streamline operations and enhance customer engagement.
JWN Stock’s Valuation & Price Performance
JWN emerges as an attractive value opportunity in the Retail - Apparel and Shoes industry, trading at a forward 12-month price-to-earnings ratio of 12.09, below the industry average of 19.20 and the Retail-Wholesale average of 25.21. The stock is undervalued compared with its industry peers, offering compelling value to investors looking for exposure to the Retail-Wholesale sector.
JWN Looks Attractive From a Valuation Standpoint
Image Source: Zacks Investment Research
Nordstrom's stock has experienced a 14.7% increase over the six months, compared with the industry’s growth of 29.5%. The company also outperformed the S&P 500 index’s growth of 12.8% in the same time frame.
JWN Stock’s Six-Month Performance
Image Source: Zacks Investment Research
Final Thoughts on Nordstrom Stock
Investors may consider JWN stock as a compelling opportunity driven by its strategic initiatives that support long-term growth. The upward revision in earnings estimates and attractive stock valuation enhance the appeal for investors, positioning JWN to deliver solid returns. The company currently has a Zacks Rank #2 (Buy).
Three Picks You Can’t Miss
We have highlighted three other top-ranked stocks in the broader sector, namely Deckers Outdoor (DECK - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and The Gap, Inc. (GAP - Free Report) .
Deckers, a footwear and accessories dealer, currently sports a Zacks Rank #1 (Strong Buy). DECK delivered an earnings surprise of 41.1% in the trailing four quarters, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Deckers’ fiscal 2024 sales and earnings indicates growth of 14.1% and 14.4%, respectively, from the year-ago reported figures.
Abercrombie, a leading casual apparel retailer, currently sports a Zacks Rank of 1. Abercrombie has a trailing four-quarter earnings surprise of 14.8%, on average.
The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and earnings indicates growth of 15.1% and 69.3%, respectively, from the year-ago reported figures.
Gap operates as an apparel retail company, which offers apparel, accessories and personal care products for men, women and children. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Gap’s fiscal 2024 sales and earnings indicates growth of 0.8% and 41.3%, respectively, from the year-ago quarter’s reported numbers. GAP has a trailing four-quarter earnings surprise of 101.2%, on average.