4 Nordstrom Analysts React To Mixed Q1 Earnings: ‘We Remain Skeptical’

Nordstrom, Inc. JWN Shares traded higher by 11% on Wednesday after the company reported strong first-quarter sales numbers and raised its full-year guidance.

On Tuesday, Nordstrom reported 6 cents of first-quarter adjusted EPS loss, slightly missing consensus analyst estimates of a 5-cent loss. First-quarter revenue of $ 3.57 billion exceeded Wall Street expectations of $ 3.28 billion. Revenue was up 19% from a year ago.

Nordstrom said net sales at its namesake stores grew 23.5% in the quarter, while Nordstrom Rack sales were up 10.3% from a year ago.

Looking ahead, Nordstrom raised its fiscal 2022 revenue growth guidance from a previous range of between 5% and 7% to a new range of 6% and 8%. The retailer also raised its 2022 adjusted EPS guidance from a previous range of $ 3.15 and a new range of $ 3.50 to $ 3.38 and $ 3.68.

Related Link: 4 Ross Analysts React To Q1 Earnings Miss, Guidance Cut, Execution Missteps

Challenging Visibility: Credit Suisse analyst Michael Binetti said Nordstrom’s first-quarter revenue growth was impressive, but its guidance is baking significant improvements in the second half of the year.

“The biggest concern is we have no near-term sales trends, but EBIT dollar growth skews significantly to 2H leaves a lot of risk in the year (if no other reason than our view that planning is beyond retail business). a few months is very hard right now), “wrote Binetti.

Telsey Advisory Group analyst Dana Telsey said visibility is still challenging given the macroeconomic headwinds in the retail sector.

“With its profitable digital business, a more optimized brick-and-mortar fleet, ongoing operational efficiencies (supply chain and inventory management), and the potential for further merchandise margin improvement, we are encouraged by the potential for FY22 and beyond,” Telsey cloudy

Guidance Risk: Bank of America analyst Lorraine Hutchinson said Nordstrom’s sales are improving, but she sees the risk to the company’s margin guidance.

“We think macro pressures will put earnings at risk, especially in 2H,” Hutchinson wrote.

BMO Capital Markets analyst Simeon Siegel said Nordstrom shares are cheap, but it has set the bar extremely high with its guidance.

“Street estimates remain below or near the low-end of even the priority guidance levels and given the tough macro environment and slight beat in the quarter, we remain skeptical that investors are going to give JWN credit for the guide until there is more sustained progress. , “Siegel wrote.

Ratings And Price Targets:

  • Bank of America has an underperform rating and a $ 21 target.
  • Credit Suisse has a Neutral rating and a $ 26 target.
  • Telsey Advisory Group has a Market Perform rating and a $ 28 target.
  • BMO Capital Markets has a Market Perform rating and a $ 28 target.

Photo: Brenda Rocha – Blossom via Shutterstock

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