Skip to Content

Nordstrom Inc JWN

Rating as of

Morningstar’s Analysis

Valuation
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

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Narrow-Moat Nordstrom’s Progress Continued in Q2 Despite Some Challenges; Shares Fairly Valued

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Nordstrom beat our 2021 second-quarter sales and earnings expectations and provided a full-year outlook above our expectations. Against an easy comparison, its quarterly sales growth of 101% eclipsed our 83% forecast. However, its sales were still down about 6% as compared with 2019’s second quarter (some negative impact from Anniversary Sale timing). Nordstrom’s operating margin also outperformed our estimate (4.2% versus 3.0%) but conspicuously paled in comparison to the double-digit operating margins recently reported by no-moat department store operators Macy’s and Kohl’s. Nordstrom’s share price slid by about 8% in post-market trading, possibly because of concerns over cost pressures and the rate of sales recovery.  We expect to lift our per share fair value estimate on the firm of $33.50 by a low-single-digit percentage but view its 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.

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

Related