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Factors Setting the Tone for Nordstrom's (JWN) Q3 Earnings

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Nordstrom, Inc. (JWN - Free Report) is scheduled to release third-quarter fiscal 2019 numbers on Nov 21, after the closing bell.

The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 67 cents, flat with the year-ago period’s reported figure. Notably, the consensus estimates have been stable in the past 30 days. The consensus mark for sales is pegged at $3.64 billion, indicating a decline of 2.9% from the year-ago reported figure.

Notably, the company’s earnings outpaced the Zacks Consensus Estimate by 18.4% in the preceding quarter. However, the bottom line lagged the consensus mark by 4.8% on average in the trailing four quarters.

Nordstrom, Inc. Price and EPS Surprise

 

Nordstrom, Inc. Price and EPS Surprise

Nordstrom, Inc. price-eps-surprise | Nordstrom, Inc. Quote

Key Factors to Note

Robust omni-channel initiatives including store expansion and constant advancement in the technology space is likely to have contributed to fiscal third-quarter performance. The company’s fiscal third-quarter revenues are likely to reflect higher sales from digital channel and increased store traffic.

Moreover, the company’s local market strategy, which leverages physical and digital assets to offer seamless shopping experience, has been acting as a catalyst. Moreover, the company’s focus on leveraging brand strength, providing excellent services and offering compelling products, remains a positive.

The third-quarter results are likely to reflect gains from cost savings and loyalty program as well as improved supply-chain and marketing capabilities.

However, higher occupancy expenses might have impacted Nordstrom’s gross margin in the fiscal third quarter. In addition, higher cost of investments toward technology, store openings and other marketing efforts are likely to get reflected in the company’s fiscal third-quarter performance.

Increase in supply chain costs, reflecting higher fulfillment and delivery expenses in relation to digital growth, have been resulting in higher expenses and affecting margins.

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.

Although Nordstrom carries a Zacks Rank #3, its Earnings ESP of -3.73% makes surprise prediction difficult.

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.

Ross Stores, Inc (ROST - Free Report) has an Earnings ESP of +4.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lowe's Companies, Inc (LOW - Free Report) has an Earnings ESP of +1.62% and a Zacks Rank #2.

Walmart Inc (WMT - Free Report) has an Earnings ESP of +0.75% and a Zacks Rank #2.

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