Nordstrom Inc

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JWN : NYSE : Services
$60.11 -1.4 | -2.2%
Today's Range: 59.96 - 61.77
Avg. Daily Volume: 3223900.0
12/09/16 - 1:50 PM ET

Financial Analysis

NORDSTROM INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. NORDSTROM INC has very weak liquidity. Currently, the Quick Ratio is 0.23 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 38.92% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)3541.03328.0
EBITDA ($mil)412.0334.0
EBIT ($mil)251.0187.0
Net Income ($mil)-10.081.0

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)531.0821.0
Total Assets ($mil)7966.08586.0
Total Debt ($mil)2778.02809.0
Equity ($mil)860.01408.0

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin40.6940.05
EBITDA Margin11.6310.03
Operating Margin7.095.62
Sales Turnover1.841.66
Return on Assets4.187.86
Return on Equity38.7247.94
Debt Q3 FY16 Q3 FY15
Current Ratio1.041.22
Interest Expense29.029.0
Interest Coverage8.666.45

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)173.2185.4
Div / share0.375.22
Book value / share4.977.59
Institutional Own % n/a n/a
Avg Daily Volume3219178.03676954.0


HOLD. The current P/E ratio indicates a significant premium compared to an average of 19.67 for the Multiline Retail industry and a premium compared to the S&P 500 average of 25.37. For additional comparison, its price-to-book ratio of 11.52 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 4.25. 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.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
JWN 30.59 Peers 19.67   JWN 5.87 Peers 9.68

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

JWN is trading at a significant 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.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
JWN 19.00 Peers 20.62   JWN NM Peers 2.17

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

JWN is trading at a valuation on par with 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.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
JWN 11.52 Peers 4.25   JWN -46.42 Peers 36.89

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.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
JWN 0.68 Peers 0.73   JWN 2.42 Peers 14.05

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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