On Wednesday, Evercore ISI maintained its In Line rating and $19.00 price target for Nordstrom shares (NYSE:JWN). The company reported that its second-quarter net sales increased by 3.4% year-over-year, closely aligning with the consensus estimate of a 3.5% rise, although slightly under Evercore ISI's expectation of 3.9%.
Same-store sales (SSS) growth slowed down, with Full Line stores observing a rise of 0.9%, down from 1.8% in the first quarter and below the anticipated 2.4%. Rack stores saw a 4.1% increase in SSS, a decrease from the 7.9% growth in the previous quarter.
The firm noted that Nordstrom's performance in the second quarter was affected by a timing shift for the Anniversary Sale, which impacted the same-store sales figures. Despite the slow growth in same-store sales, the Full Line and Rack stores outperformed Evercore ISI's expectations of 3% and 5% respectively, indicating some resilience in Nordstrom's retail segments.
Looking ahead, Nordstrom has guided for a potential slowdown in net sales for the second half of the year. The company anticipates a range between a 2.5% decline and a 1.3% increase, which represents a more conservative outlook compared to the 1.9% growth experienced in the second quarter.
The retailer's guidance reflects caution amid a retail environment that is facing various challenges. Nordstrom's forward-looking estimates set a measured tone for investors as the company navigates the latter half of the year.
The maintained In Line rating and price target suggest that Evercore ISI sees Nordstrom's stock performance aligning with market expectations, without significant over- or underperformance anticipated in the near term.
InvestingPro Insights
As Nordstrom (NYSE:JWN) navigates a challenging retail environment, current data from InvestingPro offers a deeper look into the company's financial health and market performance. With a market capitalization of $3.46 billion, Nordstrom is trading at a Price/Earnings (P/E) ratio of 11.52, reflecting market sentiment on its earnings capability. This is slightly lower than the adjusted P/E ratio for the last twelve months as of Q1 2023, which stands at 11.34. The company's Price/Book ratio during the same period is 4.14, indicating a premium compared to the book value of its assets.
Despite a slight revenue decline of 1.95% over the last twelve months as of Q1 2023, Nordstrom has shown a quarterly revenue growth of 4.84% in Q1 2023, suggesting some resilience in its retail operations. The gross profit margin remains strong at 36.16%, demonstrating the company's ability to maintain profitability amidst sales fluctuations. Additionally, Nordstrom's return on assets of 3.47% is a testament to efficient asset utilization.
An InvestingPro Tip to consider is Nordstrom's high shareholder yield, which could be appealing to investors looking for income in addition to capital gains. Another point to note is that analysts predict the company will be profitable this year, aligning with the positive quarterly revenue growth observed. For those interested in exploring further, there are additional InvestingPro Tips available at Investing.com/pro/JWN.
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