Nordstrom Shares Soar on Earnings Beat

Shares of retailer Nordstrom were jumping higher on Thursday after the company reported earnings that beat estimates.
The stock soared over 10% during after-hours trading on Thursday when Wall Street learned that the company’s third quarter financial results had beat estimates. Nordstrom also narrowed its 2019 earnings forecast.

For the third quarter, Nordstrom reported earnings per share of 81 cents while 64 cents was expected according to Refinitiv consensus estimates. Revenue was $3.67 billion compared to $3.67 billion expected.

Digital sales increased to 34% of the company total sales from 31% in the same quarter last year.

Looking ahead, the company has called for a 2% decline in fiscal 2019, and narrowed its earnings outlook a range of between $3.30 and $3.50 per share for the fiscal year. The company previously forecast the lower end of that range to be $3.25 per share.

It was last month that the company’s board declined a proposal to allow co-presidents Pete and Erik Nordstrom to raise their stake in the company.

Credit Suisse analyst Michael Binetti remarked that the decision “removes some downside support for the stock in the near-term.”

Erik B. Nordstrom said on the earnings call, “Our market strategy is transforming our business model and how we’re serving customers. We have a unique mix of assets, Full-price, Off-Price, stores, and online and we are further linking our businesses to serve customers in new and differentiated ways. The success of our strategy in Los Angeles adds to our confidence as we expand to our top 10 markets. We recently achieved an important milestone with the opening of the New York City flagship store, significantly increasing our presence in the world’s top retail market.”

He added, “Turning to our third quarter results. Our earnings exceeded expectations, demonstrating substantial progress in the delivery of our strategy and strength of our operating discipline. Through our customer focus, we drove broad-based improvement and topline trends of more than 200 basis points relative to the first half of the year. In particular, the Off-Price business delivered positive sales growth and increased profitability through strong inventory and expense execution. We’re encouraged by the momentum in our Full-Price and Off-Price businesses, as we execute our holiday strategy to establish Nordstrom, as a gifting destination for customers.”

Shares are still down roughly 26% year to date.

Disclaimer: We have no position in Nordstrom, Inc. (NYSE: JWN) and have not been compensated for this article.