Log In | Register
NEW YORK — Nordstrom Inc., which operates its namesake department stores and Nordstrom Rack chain, reports earnings for the first quarter after the market closes on Thursday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Department stores are still struggling as consumers are scaling back on spending in a tough economy.
Last Thursday, Nordstrom posted a 10.8 percent drop in April same-store sales, but results were still better than analysts expected. Same-store sales — or sales in stores open at least a year — are an important retail industry metric because they measure sales in established stores instead of newly opened ones.
Nordstrom said earnings fell 68 percent in the fourth quarter, mostly because of heavy discounting over the holiday shopping season.
The company operates 175 stores in 28 states nationwide.
BY THE NUMBERS: Last week, Nordstrom said its preliminary reading showed first-quarter sales declined 9.2 percent to $1.71 billion.
Analysts polled by Thomson Reuters expect earnings of 26 cents per share and sales of $1.68 billion.
ANALYST TAKE: Last week, Thomas Weisel Partners analyst Liz Dunn raised her price target and said it was possible that Nordstrom might report better-than-expected earnings. Dunn's new target of $27, up from $23, leaves room for shares to rise 16.9 percent from Friday's closing price of $23.10.
Dunn, who rates the stock "Overweight," said Nordstrom's "value strategy" is helping the company outperfrom other department stores.
Dunn said Nordstrom's April same-store sales report was "very impressive" when compared to other luxury department stores. April same-store sales fell 32 percent at Saks Inc. and 24.6 percent at Neiman Marcus.
"We continue to believe that Nordstrom's customer focus is serving them well in the near term while protecting the brand in the long term," Dunn wrote in a client note.
WHAT'S AHEAD: The company holds its annual shareholders meeting on May 19 in Seattle.
STOCK PERFORMANCE: For the quarter ended April 30, Nordstrom shares rose 35.1 percent. The stock has risen about 70 percent since its closing low of $6.61 on Nov. 21.
