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After Macy's and Dillard's Beat, Will Nordstrom Extend Retail Earnings Streak?
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Shares of several major department store retailers gained on Tuesday morning following positive earnings from Macy’s (M - Free Report) and Dillard’s (DDS - Free Report) . With several more players in the industry set to report this week, the focus will now shift to the likes of Nordstrom (JWN - Free Report) to continue the trend of strong results.
Macy’s shares climbed more than 11% in early trading following the release of its latest report. The industry bellwether posted adjusted earnings of $2.82 per share, beating the Zacks Consensus Estimate of $2.69.
The company saw revenue figures of $8.67 billion, missing our consensus estimate of $8.72 billion but improving 1.8% from the year-ago period. Same-store sales increased 1.3% during the holiday quarter (also read: Macy's Soars on Earnings Beat & Strong Guidance).
Macy’s expects fiscal 2018 earnings to fall in the range of $3.55 to $3.75 per share—well ahead of our current Zacks Consensus Estimate of $2.89. Management also said that it expects comps to be flat to up 1% on the year.
Meanwhile, department store chain Dillard’s also topped earnings expectations. The company reported adjusted profits of $2.82 per share, crushing the Zacks Consensus Estimate of $1.82 and soaring more than 50% on a year-over-year basis. Dillard’s shares popped more than 15% in the wake of the report.
Upbeat results from Macy’s and Dillard’s helped lift fellow retailers, including Kohl’s (KSS - Free Report) and JCPenney on Tuesday morning. The SPDR S&P Retail ETF (XRT - Free Report) was up nearly 1% in early trading hours.
But now the attention will turn to those yet to report this week, including Macy’s rival Nordstrom. The Nordstrom family is expected to finalize a go-private deal soon, and that premium is likely factored into the stock already. However, the company’s results will still be a great indicator of the health of the retail industry right now, so investors will want to pay close attention.
So what does Nordstrom have in store? Let’s take a closer look.
Latest Outlook
Based on our latest consensus estimates, we expect Nordstrom to report adjusted earnings of $1.24 per share and total revenues of $4.61 billion. This bottom line result would represent a year-over-year slump of 9.5%, but the company’s top line is expected to improve by more than 6.8%.
Nordstrom already posted its November and December sales figures, reporting revenue growth of 2.5% and comps growth of 1.2% for that period.
Earnings ESP
Investors will also want to anticipate the likelihood that Nordstrom surprises investors with better-than-anticipated earnings results. For this, we turn to our Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates. This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Just a few days before its report, JWN is sporting a Zacks Rank #2 (Buy) and an Earnings ESP of -0.72. This is because the company’s Most Accurate Estimate for earnings sits at $1.23 per share, meaning that the most recent analyst estimates have been lower than the consensus.
Despite the stock’s strong Zacks Rank, our model does not conclusively indicate that we are in store for a beat.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeneyon Twitter!
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After Macy's and Dillard's Beat, Will Nordstrom Extend Retail Earnings Streak?
Shares of several major department store retailers gained on Tuesday morning following positive earnings from Macy’s (M - Free Report) and Dillard’s (DDS - Free Report) . With several more players in the industry set to report this week, the focus will now shift to the likes of Nordstrom (JWN - Free Report) to continue the trend of strong results.
Macy’s shares climbed more than 11% in early trading following the release of its latest report. The industry bellwether posted adjusted earnings of $2.82 per share, beating the Zacks Consensus Estimate of $2.69.
The company saw revenue figures of $8.67 billion, missing our consensus estimate of $8.72 billion but improving 1.8% from the year-ago period. Same-store sales increased 1.3% during the holiday quarter (also read: Macy's Soars on Earnings Beat & Strong Guidance).
Macy’s expects fiscal 2018 earnings to fall in the range of $3.55 to $3.75 per share—well ahead of our current Zacks Consensus Estimate of $2.89. Management also said that it expects comps to be flat to up 1% on the year.
Meanwhile, department store chain Dillard’s also topped earnings expectations. The company reported adjusted profits of $2.82 per share, crushing the Zacks Consensus Estimate of $1.82 and soaring more than 50% on a year-over-year basis. Dillard’s shares popped more than 15% in the wake of the report.
Upbeat results from Macy’s and Dillard’s helped lift fellow retailers, including Kohl’s (KSS - Free Report) and JCPenney on Tuesday morning. The SPDR S&P Retail ETF (XRT - Free Report) was up nearly 1% in early trading hours.
But now the attention will turn to those yet to report this week, including Macy’s rival Nordstrom. The Nordstrom family is expected to finalize a go-private deal soon, and that premium is likely factored into the stock already. However, the company’s results will still be a great indicator of the health of the retail industry right now, so investors will want to pay close attention.
So what does Nordstrom have in store? Let’s take a closer look.
Latest Outlook
Based on our latest consensus estimates, we expect Nordstrom to report adjusted earnings of $1.24 per share and total revenues of $4.61 billion. This bottom line result would represent a year-over-year slump of 9.5%, but the company’s top line is expected to improve by more than 6.8%.
Nordstrom already posted its November and December sales figures, reporting revenue growth of 2.5% and comps growth of 1.2% for that period.
Earnings ESP
Investors will also want to anticipate the likelihood that Nordstrom surprises investors with better-than-anticipated earnings results. For this, we turn to our Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates. This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Just a few days before its report, JWN is sporting a Zacks Rank #2 (Buy) and an Earnings ESP of -0.72. This is because the company’s Most Accurate Estimate for earnings sits at $1.23 per share, meaning that the most recent analyst estimates have been lower than the consensus.
Despite the stock’s strong Zacks Rank, our model does not conclusively indicate that we are in store for a beat.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>