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Nordstrom Stock Gains on Q2 Earnings Beat, Updated FY24 Outlook
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Shares of Nordstrom, Inc. (JWN - Free Report) gained 7.7% during the after-market trading session on Tuesday, following the company’s second-quarter results, wherein both the top and bottom lines beat the respective Zacks Consensus Estimate and improved year over year.
Anniversary Sale timing, which led to the shift of one week from the third quarter to the second quarter, had a positive impact on net sales. Following the results, management updated its fiscal 2024 outlook, raising the lower end of the guidance range for comparable sales.
This Seattle, WA-based company posted adjusted earnings of 96 cents a share, which surpassed the Zacks Consensus Estimate of 74 cents and improved from 84 cents reported in the year-ago period. Total revenues of $3,894 million rose 3.2% year over year and came ahead of the Zacks Consensus Estimate of $3,850 million.
JWN’s Quarterly Performance: Key Metrics and Insights
JWN’s net sales improved 3.4% year over year to $3,785 million, with comparable sales growth of 1.9%. The timing of the Anniversary Sale event played a key role in boosting sales by 100 basis points. Top performing categories during the quarter included active, women’s apparel, beauty and kids. The gross merchandise value (GMV) rose 3.5%.
Credit card net revenues declined by 0.9% to $109 million.
Net sales for the Nordstrom banner rose 0.9% from the year-ago quarter's figure to $2,514 million, faring better than our estimate of $2,455.5 million. Nordstrom banner’s comparable sales edged up 0.9%, while GMV jumped 1.1%. The Anniversary Sale event had a favorable impact of about 200 basis points on Nordstrom banner net sales.
Sales at the Nordstrom Rack banner advanced 8.8% to $1,271 billion, faring better than our estimate of $1,222.9 million. Comparable sales rose 4.1%.
Digital sales grew by 6.2% compared with the year-ago period. The timing shift of the Anniversary Sale contributed about 100 basis points to the increase in digital sales. During the quarter, digital sales accounted for 37% of the total sales.
The gross profit, representing 36.6% of net sales, improved by 155 basis points compared to the same period in fiscal 2023. This increase was driven by strong regular price sales and the leverage gained from higher overall sales. Adjusted selling, general and administrative (SG&A) expenses, as a percentage of net sales, deleveraged 20 basis points to 33%. We had expected SG&A expenses to deleverage 10 basis points.
Adjusted earnings before interest and taxes (EBIT) came in at $244 million, up from $192 million reported in the prior-year quarter. We note that the EBIT margin increased to 6.4%, up from 5.3% registered in the year-ago period.
Nordstrom ended the quarter with cash and cash equivalents of 679 million, long-term debt of $2,615 million and total shareholders’ equity of $948 million. JWN had an available liquidity of $1.5 billion as of Aug. 3, 2024. During the six-month period, the company generated $528 million in net cash from operating activities.
What to Expect From JWN in Fiscal 2024?
Nordstrom has updated its financial expectations for fiscal 2024. It now foresees total revenues, including retail sales and credit card revenues, to be down 1% to up 1% compared with the prior estimate of down 2% to up 1%.
Management now envisions comparable sales to be flat to up 2% compared with the earlier projection of a 1% decline to a 2% rise. The company guided adjusted EBIT between 3.6% and 4% compared with the prior estimate of 3.5% to 4%.
Nordstrom now anticipates earnings in the range of $1.75-$2.05 per share. It had earlier guided earnings between $1.65 and $2.05 per share.
Shares of this Zacks Rank #3 (Hold) company have fallen 1.7% in the past three months compared with the industry’s decline of 5.7%.
Stocks to Consider
Here, we have highlighted three better-ranked stocks, namely Boot Barn Holdings (BOOT - Free Report) , Deckers Outdoor Corporation (DECK - Free Report) and Kontoor Brands (KTB - Free Report) .
Boot Barn Holdings, the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year revenues and earnings calls for growth of 10.7% and 8.9%, respectively, from the year-ago reported figures. BOOT has a trailing four-quarter earnings surprise of 7.1%, on average.
Deckers, a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Deckers’ current financial-year revenues and earnings suggests growth of 11.5% and 8.4%, respectively, from the year-ago reported figures. DECK has a trailing four-quarter earnings surprise of 47.2%, on average.
Kontoor Brands is a global lifestyle apparel company with a portfolio led by two of the world’s most iconic consumer brands, Wrangler and Lee. The company carries a Zacks Rank #2.
The Zacks Consensus Estimate for Kontoor Brands’ current financial-year revenues and earnings suggests growth of 0.1% and 12.7%, respectively, from the year-ago reported figures. KTB has a trailing four-quarter earnings surprise of 12.3%, on average.
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Nordstrom Stock Gains on Q2 Earnings Beat, Updated FY24 Outlook
Shares of Nordstrom, Inc. (JWN - Free Report) gained 7.7% during the after-market trading session on Tuesday, following the company’s second-quarter results, wherein both the top and bottom lines beat the respective Zacks Consensus Estimate and improved year over year.
Anniversary Sale timing, which led to the shift of one week from the third quarter to the second quarter, had a positive impact on net sales. Following the results, management updated its fiscal 2024 outlook, raising the lower end of the guidance range for comparable sales.
This Seattle, WA-based company posted adjusted earnings of 96 cents a share, which surpassed the Zacks Consensus Estimate of 74 cents and improved from 84 cents reported in the year-ago period. Total revenues of $3,894 million rose 3.2% year over year and came ahead of the Zacks Consensus Estimate of $3,850 million.
JWN’s Quarterly Performance: Key Metrics and Insights
JWN’s net sales improved 3.4% year over year to $3,785 million, with comparable sales growth of 1.9%. The timing of the Anniversary Sale event played a key role in boosting sales by 100 basis points. Top performing categories during the quarter included active, women’s apparel, beauty and kids. The gross merchandise value (GMV) rose 3.5%.
Credit card net revenues declined by 0.9% to $109 million.
Net sales for the Nordstrom banner rose 0.9% from the year-ago quarter's figure to $2,514 million, faring better than our estimate of $2,455.5 million. Nordstrom banner’s comparable sales edged up 0.9%, while GMV jumped 1.1%. The Anniversary Sale event had a favorable impact of about 200 basis points on Nordstrom banner net sales.
Sales at the Nordstrom Rack banner advanced 8.8% to $1,271 billion, faring better than our estimate of $1,222.9 million. Comparable sales rose 4.1%.
Digital sales grew by 6.2% compared with the year-ago period. The timing shift of the Anniversary Sale contributed about 100 basis points to the increase in digital sales. During the quarter, digital sales accounted for 37% of the total sales.
The gross profit, representing 36.6% of net sales, improved by 155 basis points compared to the same period in fiscal 2023. This increase was driven by strong regular price sales and the leverage gained from higher overall sales. Adjusted selling, general and administrative (SG&A) expenses, as a percentage of net sales, deleveraged 20 basis points to 33%. We had expected SG&A expenses to deleverage 10 basis points.
Adjusted earnings before interest and taxes (EBIT) came in at $244 million, up from $192 million reported in the prior-year quarter. We note that the EBIT margin increased to 6.4%, up from 5.3% registered in the year-ago period.
Nordstrom, Inc. Price, Consensus and EPS Surprise
Nordstrom, Inc. price-consensus-eps-surprise-chart | Nordstrom, Inc. Quote
JWN’s Financial Health Snapshot
Nordstrom ended the quarter with cash and cash equivalents of 679 million, long-term debt of $2,615 million and total shareholders’ equity of $948 million. JWN had an available liquidity of $1.5 billion as of Aug. 3, 2024. During the six-month period, the company generated $528 million in net cash from operating activities.
What to Expect From JWN in Fiscal 2024?
Nordstrom has updated its financial expectations for fiscal 2024. It now foresees total revenues, including retail sales and credit card revenues, to be down 1% to up 1% compared with the prior estimate of down 2% to up 1%.
Management now envisions comparable sales to be flat to up 2% compared with the earlier projection of a 1% decline to a 2% rise. The company guided adjusted EBIT between 3.6% and 4% compared with the prior estimate of 3.5% to 4%.
Nordstrom now anticipates earnings in the range of $1.75-$2.05 per share. It had earlier guided earnings between $1.65 and $2.05 per share.
Shares of this Zacks Rank #3 (Hold) company have fallen 1.7% in the past three months compared with the industry’s decline of 5.7%.
Stocks to Consider
Here, we have highlighted three better-ranked stocks, namely Boot Barn Holdings (BOOT - Free Report) , Deckers Outdoor Corporation (DECK - Free Report) and Kontoor Brands (KTB - Free Report) .
Boot Barn Holdings, the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year revenues and earnings calls for growth of 10.7% and 8.9%, respectively, from the year-ago reported figures. BOOT has a trailing four-quarter earnings surprise of 7.1%, on average.
Deckers, a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Deckers’ current financial-year revenues and earnings suggests growth of 11.5% and 8.4%, respectively, from the year-ago reported figures. DECK has a trailing four-quarter earnings surprise of 47.2%, on average.
Kontoor Brands is a global lifestyle apparel company with a portfolio led by two of the world’s most iconic consumer brands, Wrangler and Lee. The company carries a Zacks Rank #2.
The Zacks Consensus Estimate for Kontoor Brands’ current financial-year revenues and earnings suggests growth of 0.1% and 12.7%, respectively, from the year-ago reported figures. KTB has a trailing four-quarter earnings surprise of 12.3%, on average.