NEW YORK (TheStreet) -- Shares of Nordstrom (JWN) are rising by 2.52% to $73.23 in pre-market trading on Friday morning, after the fashion specialty retailer announced a special dividend and a share repurchase program.
Following the close of trading on Thursday, Nordstrom announced a special dividend of $4.85 per share and also said that it completed the sale of its credit-card business to Toronto-Dominion Bank (TD) for $2.2 billion.
The dividend will be payable on October 27, to shareholders of record as of the close of business on October 12.
The company had announced the sale back in May, and it will allow Nordstrom to improve its capital efficiency, while maintaining a close link to its customers, the Wall Street Journal reports.
The company is eager to collaborate with TD Bank and added that it is "also pleased to be able to return capital directly to shareholders using our balanced approach to capital allocation."
Nordstrom has also announced a $1 billion share repurchase program.
Separately, TheStreet Ratings team rates NORDSTROM INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
We rate NORDSTROM INC (JWN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JWN's revenue growth has slightly outpaced the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 9.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has increased to $207.00 million or 36.18% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.86%.
- NORDSTROM INC has improved earnings per share by 14.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, NORDSTROM INC's EPS of $3.72 remained unchanged from the prior years' EPS of $3.72. This year, the market expects an improvement in earnings ($3.80 versus $3.72).
- 40.91% is the gross profit margin for NORDSTROM INC which we consider to be strong. Regardless of JWN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JWN's net profit margin of 5.70% compares favorably to the industry average.
- You can view the full analysis from the report here: JWN