Skip to Content

Nordstrom Inc JWN

Rating as of

Morningstar’s Analysis

Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat


Capital Allocation


Nordstrom’s Q4 Profitability Was Weak but Its Cost Reduction Plans Are on Track; Shares Fully Valued

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Narrow-moat Nordstrom’s results for the fourth quarter of 2020 and guidance for 2021 were in line with its earlier (January) pre-announcement and (February) analyst event disclosures (see our prior notes). While its fourth-quarter sales decline of 20.0% was marginally better than our forecast of a 21.5% drop, its operating margin of just 0.8% was well below our 3.7% forecast. More positively, the firm realized cost savings of more than $420 million in the year, including more a than $300 million reduction in permanent overhead expenses, which we think should allow it to achieve 2021 EPS around the $1.57 that we had previously forecast. We do not expect to make any material change to our per share fair value estimate of $33.50 and view Nordstrom’s shares as fully valued.

Read Full Analysis

Company Profile

Business Description

Nordstrom is a fashion retailer that operates approximately 100 department stores in the U.S. and Canada and approximately 250 off-price Nordstrom Rack stores. The company also operates both full- and off-price e-commerce sites. Nordstrom’s largest merchandise categories are women’s apparel (29% of 2020 sales), shoes (26% of 2020 sales), and women’s accessories (14% of 2020 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 Nordstrom family.

1617 Sixth Avenue
Seattle, WA, 98101
T +1 206 628-2111
Sector Consumer Cyclical
Industry Department Stores
Most Recent Earnings Jan 31, 2021
Fiscal Year End Jan 29, 2022
Stock Type Distressed
Employees 62,000