Why JWN is far from over
Nordstrom, Inc. (NYSE: JWN) is an American luxury fashion retailer. JWN department stores sell clothing, shoes, handbags, jewelry, accessories, cosmetics and fragrances. Some stores have home furnishings and wedding departments, and some have on-site cafes, restaurants, and espresso bars. Nordstrom operates more than 350 locations under the names Nordstrom, Nordstrom Local and Nordstrom Rack. This afternoon, JWN was last up 2.4% to $ 33.28.
In recent news, Nordstrom announced Farrell Redwine as its new Chief Human Resources Officer on July 20. Farrell joined Nordstrom in 2016 and has held a variety of leadership roles throughout her tenure. Prior to Nordstrom, she held global leadership roles in HR at several other large companies, including ExxonMobil and Time Inc. JWN is also expected to release its quarterly earnings report on August 23rd.
In the past 12 months, Nordstrom has exceeded earnings expectations in two of its last four quarterly reports. For the third quarter of fiscal 2020, JWN missed analyst estimates by $ 0.14 and reported earnings per share of $ 1.62. For the fourth quarter of fiscal 2020, Nordstrom’s earnings per share rose to $ 0.34, beating expectations by $ 0.40. For the first quarter of fiscal 2021, JWN saw earnings decline to $ 0.21 per share, but still beat estimates by a margin of $ 0.07. Most recently, Nordstrom reported earnings per share of $ -0.64 for the second quarter of fiscal 2021, falling short of expectations by $ 0.07. Analysts expect JWN to curve its reporting for the third quarter of the fiscal year and bring it into positive territory with a forecast EPS of $ 0.27.
Nordstrom stock is up about 137% year over year, and JWN is up nearly 182% since its low of a multi-year low of $ 11.72 last fall. JWN’s shares are up 7% since the start of the year. However, Nordstrom stock has fallen nearly 30% since its nearly two-year high of $ 46.45 in mid-March.
Basically, there are many concerns with JWN, perhaps the largest of which is rating. Even after losing about a third of its value, Nordstrom stock still has a sky-high price-to-earnings ratio of 27.62.
The fashion retailer has struggled to make significant strides in its recovery after suffering massive losses in sales and profits due to the COVID-19 pandemic. Nordstrom also has a balance sheet of $ 5.46 billion in debt and only $ 377 million in cash. This balance leaves JWN with little hope of growth in the long term. In general, Nordstrom stock may have already peaked and could easily continue its downtrend.