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Nordstrom Inc JWN

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Stock XNYS Rating as of
$22.10 +1.07 (5.09%)
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As of Delayed Price Closed
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Company Report

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Nordstrom Earnings: Solid Sales Performance but Disappointing Profitability; Shares Very Undervalued

David Swartz

Nordstrom showed progress on its sales initiatives in the first quarter, although some unusual factors negatively affected its gross margin. More importantly, the firm held to its full-year guidance for same-store sales of down 1% to up 2%, an EBIT margin of 3.5%-4%, and $1.65-$2.05 in earnings per share. As our forecast aligns with this outlook, we do not expect to make any material change to our $38.50 fair value estimate, leaving shares very undervalued. Although its results have been rocky since the pandemic, we think Nordstrom can reach its 6% operating margin goal in about two years.

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Price vs Fair Value

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JWN is trading at a 164% premium.
Price
$21.03
Fair Value
$37.10
Uncertainty
Very High
1-Star Price
$54.93
5-Star Price
$56.72
Economic Moat
Kphbx
Capital Allocation
Ypsmsxyd

Bulls Say, Bears Say

Bulls

Nordstrom's digital sales were about $5.2 billion in 2023, making it one of the largest e-commerce firms in the United States.

Bears

Large amounts of apparel sales have shifted to outlets, e-commerce, and specialty stores. Annual US department store sales have dropped by more than half over the past 15 years.

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Trading Information

Previous Close Price
$21.03
Day Range
$20.29–22.31
52-Week Range
$12.88–23.53
Bid/Ask
$22.08 / $23.20
Market Cap
$3.61 Bil
Volume/Avg
8.0 Mil / 4.0 Mil

Key Statistics

Price/Earnings (Normalized)
12.75
Price/Sales
0.24
Dividend Yield (Trailing)
3.53%
Dividend Yield (Forward)
3.53%
Total Yield
3.47%

Company Profile

Nordstrom is a fashion retailer that operates about 93 department stores and approximately 260 off-price Nordstrom Rack stores. The company also operates both full- and off-price e-commerce sites, two clearance stores, and seven Local locations. Nordstrom’s largest merchandise categories are women’s apparel (27% of 2023 sales), shoes (26% of 2023 sales), men’s apparel (15% of 2023 sales), and beauty (13% of 2023 sales). Nordstrom, which traces its history to a shoe store opened in Seattle in 1901, continues to be partially owned and managed by members of the eponymous family.
Sector
Consumer Cyclical
Industry
Department Stores
Stock Style Box
Small Value
Total Number of Employees
54,000
Website
https://www.Nordstrom.com

Competitors

Valuation

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Metric
JWN
M
KSS
Price/Earnings (Normalized)
 12.755.757.38
Price/Book Value
 4.121.300.61
Price/Sales
 0.240.230.13
Price/Cash Flow
 3.312.952.03
Price/Earnings
JWN
M
KSS

Financial Strength

Metric
JWN
M
KSS
Quick Ratio
 0.310.250.13
Current Ratio
 1.021.381.31
Interest Coverage
 1.831.062.08
Quick Ratio
JWN
M
KSS

Profitability

Metric
JWN
M
KSS
Return on Assets (Normalized)
 5.34%5.76%2.16%
Return on Equity (Normalized)
 66.16%23.45%8.40%
Return on Invested Capital (Normalized)
 10.78%11.22%5.26%
Return on Assets
JWN
M
KSS
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