Nordstrom, Inc. (NYSE:JWN) crushed Wall Street’s estimates in the most recent quarter and raised its guidance, sending JWN stock up by double digits in Friday’s premarket action.
And all of this comes despite JWN posting its first quarterly sales decline in seven years. That suggests Nordstrom stock has put in its bottom after a year-long rout that saw it lose as much as half its value earlier this summer.
In other words, the inflection point has arrived.
Management affirmed its revenue forecast and raised its profit expectations. JWN now expects full-year earnings in a range of $2.60 to $2.75 a share, up from a prior outlook for $2.50 to $2.70 a share. Analysts on average were looking for full-year earnings of $2.58 a share, according to survey by Thomson Reuters. (Cue a Nordstrom stock rally.)
Department stores have been struggling with dwindling traffic and even high-end JWN hasn’t been immune. Excess inventory and discounts have wreaked havoc on margins across the industry, but it would appear that JWN and other names are starting to find a new equilibrium.
JWN Stock: Set for a Second-Half Bounce?
Like JWN, reports from Macy’s Inc (NYSE:M), Kohl’s Corporation (NYSE:KSS), J C Penney Company Inc (NYSE:JCP) weren’t exactly things of beauty, but they did add to a mounting body of evidence that the worst of the sector downturn is behind it.
For the most recent quarter, Nordstrom’s profit fell 45% to $117 million, or 67 cents a share, from $211 million, or $1.09 per share, a year earlier. The Street was looking for earnings of 56 cents a share. That’s a big beat.
Revenue fell 1.4% $3.65 billion, which was short of analysts’ estimates for $3.68 billion. Same-store sales — and important industry metric — fell 2.8% at the company’s full-price stores.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
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