Nordstrom (JWN) delivered a strong second quarter of 2024, exceeding both earnings and revenue expectations. The company reported earnings per share of $0.96, beating the Zacks Consensus Estimate of $0.74. This represents a 29.73% earnings surprise compared to the previous year’s $0.84 per share. Furthermore, Nordstrom’s revenue for the quarter reached $3.89 billion, surpassing the Zacks Consensus Estimate by 1.15% and surpassing the year-ago revenue of $3.77 billion.
While these results are positive, investors are still cautious about Nordstrom’s future performance. The stock has performed well year-to-date, but its immediate price movement will hinge on management’s commentary on the earnings call and future earnings expectations.
To assess Nordstrom’s future prospects, investors should consider the company’s earnings outlook, which includes current consensus earnings expectations and how these expectations have changed recently. Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions.
Prior to the earnings release, the trend of estimate revisions for Nordstrom was mixed. While the magnitude and direction of these revisions might change following the recent earnings report, the current status assigns a Zacks Rank #3 (Hold) to the stock. This suggests that the shares are expected to perform in line with the market in the near future.
The current consensus EPS estimate for the coming quarter stands at $0.26 on $3.28 billion in revenues, while the current fiscal year estimate is $1.77 on $14.73 billion in revenues. However, investors should also consider the broader industry outlook, as it can significantly impact the stock’s performance.
The Retail – Apparel and Shoes industry, to which Nordstrom belongs, currently ranks in the bottom 34% of the 250+ Zacks industries. Historically, the top 50% of Zacks-ranked industries have outperformed the bottom 50% by a factor of more than 2 to 1.
Another company in the same industry, Vera Bradley (VRA), is expected to report its results for the quarter ended July 2024 on September 11. The company is projected to post quarterly earnings of $0.31 per share, representing a year-over-year decline of 6.1%. The consensus EPS estimate for the quarter has been revised 15.2% lower over the last 30 days to its current level. Vera Bradley’s revenues are expected to be $120.53 million, down 6% from the year-ago quarter.
