Nordstrom Post Deeper Loss in Q1, Shares Fall

Seattle-based luxury department store chain Nordstrom reported a deeper-than-expected loss in the first quarter and said its net sales fell 13% over the first quarter of 2019, sending its shares down over 5% on Wednesday.

The company said net sales increased 44% from the same period in fiscal 2020 and decreased 13% from the same period in fiscal 2019, representing a sequential improvement of 720 basis points relative to the fourth quarter of fiscal 2020.

Nordstrom reported a loss of $166 million, or $1.05 per share, worse than the Wall Street consensus estimates for a loss of $0.57 per share, compared to a loss of $521 million, or $3.33 a share, a year ago. But the company said its total revenue rose to $3.01 billion, beating the market expectations of $2.90 billion.

Nordstrom shares slumped over 5% to $34.63 on Wednesday. The stock rose over 10% so far this year.

Analyst Comments

“1Q EPS miss and management’s conservative outlook drove the stock -7% AMC. This suggests investors expected stronger results on the back of significant retailer beat & raise quarters. We flag conservative guidance appears beat-able, but the good news seems largely priced in. Staying EW on $36 price target,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“Despite the weaker 1Q results relative to peers, we would expect JWN sales & earnings recovery to accelerate through the year. Overall, JWN’s 2021 guidance appears conservative and beatable, which will be necessary to support the shares at this price. All in, we are constructive Nordstrom revenue and margin growth potential for 2021 and into 2022, as it benefits from lagged re-opening tailwinds. But the good news appears priced in.”

Nordstrom Stock Price Forecast

Seven analysts who offered stock ratings for Nordstrom in the last three months forecast the average price in 12 months of $38.57 with a high forecast of $48.00 and a low forecast of $20.00.

The average price target represents an 11.28% increase from the last price of $34.66. Of those seven analysts, two rated “Buy”, four rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast of $36 from $34 with a high of $53 under a bull scenario and $21 under the worst-case scenario. The firm gave an “Equal-weight” rating on the specialty retailer’s stock.

Several other analysts have also updated their stock outlook. Telsey Advisory Group lowered the target price to $36 from $44. Deutsche Bank cut the target price to $40 from $42. JPMorgan slashed the price target to $39 from $42. Barclays raised the target price to $20 from $19.

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