Nordstrom Inc

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JWN : NYSE : Services
$51.88 up 0.40 | 0.78%
Today's Range: 51.39 - 52.60
Avg. Daily Volume: 3,414,500
09/30/16 - 4:02 PM ET

Financial Analysis


NORDSTROM INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. NORDSTROM INC has very weak liquidity. Currently, the Quick Ratio is 0.35 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 62.38% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3651.03701.0
EBITDA ($mil)385.0466.0
EBIT ($mil)221.0326.0
Net Income ($mil)117.0211.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)892.0423.0
Total Assets ($mil)8130.09700.0
Total Debt ($mil)2782.03141.0
Equity ($mil)937.02491.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin39.8840.91
EBITDA Margin10.5412.59
Operating Margin6.058.81
Sales Turnover1.771.45
Return on Assets5.217.58
Return on Equity45.2529.54
Debt Q2 FY16 Q2 FY15
Current Ratio1.011.57
Debt/Capital0.750.56
Interest Expense30.032.0
Interest Coverage7.3710.19


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)173.3188.2
Div / share0.370.37
EPS0.671.09
Book value / share5.4113.24
Institutional Own % n/a n/a
Avg Daily Volume3524157.04356419.0

Valuation


HOLD. This stock's P/E ratio indicates a premium compared to an average of 17.40 for the Multiline Retail industry and a discount compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 9.34 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 3.72. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. After reviewing these and other key valuation criteria, NORDSTROM INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
JWN 21.49 Peers 17.40   JWN 3.00 Peers 9.11

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

JWN is trading at a premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

JWN is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
JWN 16.83 Peers 16.80   JWN NM Peers 1.27

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

JWN is trading at a premium to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

JWN's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
JWN 9.34 Peers 3.72   JWN -38.16 Peers 22.52

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

JWN is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, JWN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
JWN 0.61 Peers 0.66   JWN 2.28 Peers 22.12

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

JWN is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

JWN significantly trails its peers on the basis of sales growth

 

 

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