Nordstrom, Inc. ($JWN) Earnings (Q1 FY23)

 Nordstrom, Inc. ($JWN) Earnings and Opinion:


Nordstrom is a company in the Consumer Cyclical sector and operates in the Department Stores industry. The company is a fashion retailer and offers a variety of brands to all ages and genders. Nordstrom was founded in 1901 and is currently headquartered in Seattle, Washington. The company was first traded on the stock market in 1971.

Nordstrom EPS and Revenue (Q1 FY23):

  • EPS of -$0.06 missing expectations of -$0.04
  • Revenue of $3.57B beating expectations of $3.29B
Nordstrom Q1 Highlights:
  • Total company sales increased 19%
  • Nordstrom and Nordstrom Rack saw double-digit sales growth
  • Share repurchase program of $500M initiated
  • Gross profit as percentage of sale of 32.8
Opinion:
Nordstrom is moving higher after reporting earnings after the market closed today. They were able to beat expectations on the revenue side of things, but missed slightly on the EPS expectations. They saw some solid increases in sales in both the main store line and Nordstrom Rack. A big reason for the movement of the stock has to be the issuance of the stock repurchase program. This will hopefully put the stock moving back in the right direction after a struggle for a while now. Another thing to note was that they saw a flat line in digital sales. Hinting at the fact that the phase on in-person shopping is starting to appear again, after being absent for the duration of the lockdowns in the pandemic. This is good news for keeping stores operating and the need for the stores to actually be operating. As far as stock performance goes, the stock is down over 44% in the past 12 months. It has been hovering around a 52 week low for a while now. The company definitely has some very slim margins with profitability, which makes sense due to flipping a lot of brands products. For valuations, the stock has a P/E ratio of 18.51 and a P/S ratio of 0.22. These mean it is pretty "cheap" and in a sense it definitely looks like it. It hasn't reached the IPO levels, but it definitely looks like it is plateauing that way. As far as I'm concerned, the return on equity is very high. However, the debt is outrageous compared to the cash levels. I have seen this to be a common theme with a lot of these department and retail stores. I guess its common because they just get by with paying off debts while maintaining profitability. I guess this could be the reason a lot of them just have steady returns and nothing out of the ordinary. I am going to stay away from this one. I never really liked the business models of these department stores, as you can see with the margins so slim. I like some other retail stores like grocers, because they are able to take profitability to another level. Nordstrom needs to prove a lot more and get back on the right track for you to consider putting your money to them.

*Information from Nordstrom, Yahoo Finance, Google, CMLVIZ

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