NORDSTROM INC. (New York symbol JWN; www.nordstrom.com) mainly sells clothing, accessories and footwear. The company owns and operates 248 stores in 33 states.
In the second quarter of its 2014 fiscal year, which ended August 3, 2013, Nordstrom’s sales rose 6.3%, to $3.2 billion from $3.0 billion a year earlier. Same-store sales rose 4.2% on strong demand for men’s apparel, men’s shoes and children’s clothing. Online sales jumped 37%.
Earnings gained 17.9%, to $184 million from $156 million. Per-share earnings rose 24.0%, to $0.93 from $0.75, on fewer shares outstanding.
Stock investing: Nordstrom slated to open 4 Canadian stores in 2014
The company caters to wealthier shoppers, so it’s less vulnerable to the current consumer spending slowdown than other department stores. It has also brought in new strategies that are boosting its sales, such as equipping sales clerks with mobile devices that let them check inventory levels and cut checkout times.
Even so, Nordstrom feels its same-store sales growth will slow to 2% to 3% for all of fiscal 2014, down from its earlier prediction of 3% to 5%.
Nordstrom plans to open 14 new Nordstrom Rack stores in the next six months. These outlets sell clearance merchandise from Nordstrom’s regular stores. That helps it attract cost-conscious shoppers.
In addition, the company expects to open four new stores in Canada between 2014 and 2016; these will be its first outlets outside the U.S. However, Nordstrom already sells its goods to customers in other countries, including Canada, through its website.
The company’s $1.20 dividend yields 2.1%.
In the latest edition of Wall Street Stock Forecaster, we examine Nordstrom’s earnings outlook and whether its new sales strategies and clearance outlets will help it resist the pressure of discount chains. We conclude with clear buy-hold-sell advice on the stock.
COMMENTS PLEASE—Share your investment experience and opinions with fellow TSINetwork.ca members
Do you and your family shop regularly at traditional department stores or do you find yourself going more often to the so-called “big box” discount stores? Do you think the higher-end department stores will lose ground to the discount chains, or is there ample room for both types of stores? Do you invest in retail chains of any kind? Let us know what you think.
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