The Seattle-based upscale retailer announced an 11% drop in income, however the company stated that this was common, as their largest sale of the year took place during the reported quarter. To me, this is not bearish news. Sales increased 7.4% to $2.92 billion with same-store sales increasing 4.5%. They reported earnings of $156 million or 75 cents a share. Analysts were expecting earnings of 74 cents a share with revenue of $2.96 billion. Last year the company reported earnings of $175 million and 80 cents a share.
Nordstroms guidance rose, with same-store sales expected to rise around 6.5%, an increase from the previous expected rise of 4-6%. Full year earnings expectations also rose to between $3.4 and $3.5 per share from the previous estimate of $3.30 to $3.45 a share. Nordstrom Rack posted a 7.7% increase in sales.
I consider the demand for Nordstrom and Nordstrom Rack relatively inelastic as they are niche markets that fit both sides of the U.S. consumer demographic. I would consider JWN a decent buy and hold opportunity. Maybe buying a condor in this stock would be a way to generate income in the near term.
David Cornes holds a degree in economics from the University of Montana.
