Nordstrom's (JWN) third-quarter results will show how the company's inventory management is going as well as its outlook for the holiday season.
The Seattle-based retailer, which reports results on November 12, may be able to beat estimates, with Credit Suisse analyst Michael Exstein looking to results from Cheesecake Factory (CAKE) as a proxy. Exstein noted that results from Cheesecake Factory and Nordstrom had a 73% correlation rate from 2012 to 2014 but dipped to 32% in 2015 because of holiday shifts.
However, recent figures from Cheesecake Factory showed an improvement, which Exstein believes will bode well for Nordstrom. "With CAKE and [Nordstrom] sharing a similar customer base and locations, we believe that theacceleration in comps and traffic could be a positive read-through for [Nordstrom's] sales performance," the analyst wrote in a note to clients.
Shares of Nordstrom have significantly outperformed over the past four months, gaining nearly 40%, as investors are betting the company's margins have stabilized, Deutsche Bank analyst Paul Trussell wrote in a note.
Trussell expects the company to earn 55 cents a share in the third quarter, $2.92 for the full year and $3.22 for 2017, all above what Wall Street is expecting. Analysts surveyed by Yahoo! Finance expect the company to earn 51 cents a share on $3.48 billion in revenues.
These three ETFs may benefit if investors like what Nordstrom has to say about the past 90 days and its place in e-commerce, as well as what's likely to happen in the fourth quarter.