Nordstrom Higher After Surprise 3rd-Quarter Profit

Nordstrom shares were higher after the upscale retailer reported a surprise fiscal-third-quarter profit.
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Nordstrom  (JWN) - Get Report shares were higher after the upscale retailer reported a surprise fiscal-third-quarter profit.

For the quarter ended Oct. 31, Nordstrom reported net income of 34 cents a share, down 58% from 81 cents a share in the year-earlier quarter. 

Revenue fell 16% to $3 billion from $3.57 billion.

A survey of analysts by FactSet produced consensus estimates of a GAAP net loss of 13 cents a share on revenue of $3.13 billion.

Shares of the Seattle retailer at last check were up 7.7% at $26.45. They closed the regular Tuesday session up 4.7% at $24.55. 

The stock has more than doubled from its 52-week low $11.72, set in late September. It was trading above $43 in January, before the pandemic.

“Our ability to significantly strengthen our financial flexibility early in the pandemic was key to delivering operating profitability of more than $100 million and cash flow of more than $150 million in the third quarter,” Chief Executive Erik Nordstrom said in a statement.

The cash flow enabled Nordstrom to pay down an additional $300 million on its revolving line of credit. And the chain ended the quarter with $1.5 billion in liquidity, including $900 million of cash.

Two weeks ago, analysts at Telsey upgraded Nordstrom stock to outperform from market perform with a price target of $17.

Analyst Dana Telsey said Nordstrom was positioned to gain market share, building off a strong balance sheet.

In particular, the analyst said, the company's off-price channel has room to grow, Nordstrom's digital presence is profitable and growing, and it has streamlined its store network and its operations.

Nordstrom Rack "represents the biggest source of new customers" for the retailer, the company said in its third-quarter report.