Shoppers want bargains even when they're buying from upscale department stores.
That's part of what Nordstrom, Inc. (JWN) - Get Nordstrom Inc. Report has been dealing with, and the results of the dilemma will show on Thursday, Aug. 16, when it releases second-quarter 2018 results after the bell.
Analysts surveyed by Factset Inc. are predicting earnings per share of 84 cents on sales of $3.965 billion with same-store sales expected to rise 0.8%.
Investors will be scrutinizing the company's discount Rack stores' performance, comparing it with the off-price industry leader TJX Companies, (TJX) - Get TJX Companies Inc. (The) Report They'll also be looking for results from the Men's Store, which opened in April in New York City. A full-price woman's store is set to debut next year across the street.
Shares of Nordstrom were down more than 5% Wednesday, ending the trading day at $51.86. Over the 52-week period, they have ranged from $37.79 to $54.97.
Here's what analysts had to say about the Seattle-based chain in recent notes:
- Credit Suisse, Michael Binetti. Neutral; $52 price target. "We estimate second-quarter EPS of $0.84 (Street $0.84), based on single-store sales up 0.8% (Street: up 0.8%) due to improving trends at Rack and digital."
- JP Morgan, Matthew Boss. Neutral; $52 price target established for December 2019. "Modeling second-quarter same-store-sales of +0.9% (below the Street at +1%) comprised of +0.8% full-line same-store sales and up 1.2% Rack same-store sales equating to $0.87 EPS (vs. Street at $0.85)."
- PiperJaffray, Erinn E. Murphy. "We are cautious on JWN shares," Murphy wrote in a note after assessing results from the anniversary sale in July. "Based on our analysis, where we look at how each of the 418 items in the catalog performed during the sale," she added, "we found that 32% of the items had a high-sell through/sell-out rate. This rate was below the 35% last year, and just above the 31% rate from 2016. We remain below consensus for second-quarter EPS and are reducing our price target to $47."
- RBC Capital Markets, Brian Tunick. Perform; $49 price target. "Differentiation is key to survival in retail and JWN has the right formula. As Amazon impact and emergence of digitally native brands remain a key concern for all retailers, the management once again highlights the differentiation of its offerings from both product and service perspective. We believe product remains a key differentiator for Nordstrom (only 15% overlap with Amazon) particularly as modern customers increasingly embrace high/low assortments and brand discovery," he wrote after the company's analyst day last month.
Nordstrom, Inc. is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio