Stock down after 1Q results
Nordstrom’s (JWN) stock price fell 10.8% on May 12 in reaction to the company’s fiscal 1Q17 results, which were announced after markets closed on May 11. The company’s 1Q17 earnings were way ahead of the analysts’ estimates. However, its same-store sales fell on a year-over-year basis, reflecting weakness in the department store sector. Earlier, Nordstrom’s stock fell 7.6% on May 11 as sales of department store peers Macy’s (M) and Kohl’s (KSS) fell in 1Q17.
As of May 12, Nordstrom’s stock price has fallen 14% on a YTD (year-to-date) basis. Stock prices for Macy’s, JCPenney (JCP), and Kohl’s have fallen 34.1%, 45.2%, and 26.1%, respectively, since the start of 2017. All these department sector stocks have underperformed the S&P 500 Index (SPX), which has fallen 6.8% on a YTD basis as of May 12.
The top lines of department store stocks have been under pressure due to competition from online retailers like Amazon (AMZN), attractive discount deals offered by off-price retailers like TJX Companies (TJX) and Ross Stores (ROST), and lower-than-expected apparel sales.
In this series on Nordstrom, we’ll analyze the factors that affected the company’s earnings, sales, and margins in fiscal 1Q17. We’ll also discuss the valuation for Nordstrom after its 1Q17 earnings.
We’ll discuss the company’s earnings in the next part of this series.