Nordstrom (JWN) AI Stock Analysis

• Market Cap: $4.00B
• Dividend Yield: 3.13%
• Average Volume (3M): 1.72M
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.99
• Revenue Growth: 3.57%
• EPS Growth: 120.60%
• Country: US
• Employees: 54,000
• Sector: Consumer Cyclical
• Sector Strength: 53
• Industry: Retail - Discretionary
• EPS (TTM): 1.57
• Shares Outstanding: 165,047,100
• 10 Day Avg. Volume: 2,007,481
• 30 Day Avg. Volume: 1,718,507
• PEG Ratio: 0.13
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.26
• Price to Cash Flow (P/CF): -6.40
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $24.13
• Price Target Upside: -0.54% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

Nordstrom's overall stock score reflects a balanced outlook. Strong cash flow and profitability metrics are offset by high leverage and operational challenges. Technical indicators and valuation suggest little movement, while the earnings call highlights both strategic successes and ongoing hurdles.

Positive Factors

Earnings

Adjusted EPS increased to $1.10, up from $0.96 last year and well above consensus expectations, with solid expense control contributing to the improvement.

Negative Factors

Inventory Management

Inventory increased above typical levels, driven by a buildup of cold-weather categories and inventory needed to support the growth of Rack stores, creating potential markdown risk.

Sector Challenges

Analyst sees risk to sales and profitability given structural challenges within the department store sector.

Nordstrom Business Overview & Revenue Model

Company Description

Nordstrom, Inc. (JWN) is a leading fashion retailer in the United States, operating a chain of department stores and a robust e-commerce platform. The company offers a wide range of high-quality apparel, footwear, beauty products, accessories, and home goods. Nordstrom is known for its customer-centric approach, providing personalized shopping experiences through its full-line stores, Nordstrom Rack off-price retail division, and online services.

How the Company Makes Money

Nordstrom generates revenue primarily through the sale of apparel, footwear, and accessories in its full-line stores, Nordstrom Rack locations, and e-commerce platforms. The company's key revenue streams include retail sales from its physical stores and online channels, offering a mix of high-end and mid-range products. Additionally, Nordstrom benefits from its Nordstrom Rack division, which helps to clear excess inventory while attracting a value-conscious customer segment. The company also earns income through its credit card operations in partnership with a financial institution, offering loyalty programs that encourage repeat purchases. Nordstrom's focus on customer service, exclusive brand partnerships, and a diverse product offering are significant factors contributing to its financial performance.

Nordstrom Financial Statement Overview

Summary

Nordstrom's financial performance shows mixed results. The income statement reveals moderate efficiency in cost management but faces challenges with inconsistent revenue growth and a negative EBIT margin. The balance sheet highlights high leverage, marked by a high debt-to-equity ratio, presenting financial risks despite a strong return on equity. However, cash flow metrics are strong, reflecting effective cash generation and management.

Income Statement

The income statement for Nordstrom shows moderate performance with a gross profit margin of 10.85% for TTM, indicating efficiency in cost management despite a challenging retail environment. The TTM net profit margin is 2.33%, a recovery from previous periods suggesting improved profitability. However, the negative EBIT margin for TTM reflects operational challenges. Revenue growth has been inconsistent, with a decline in recent periods compared to 2020.

Balance Sheet

Nordstrom's balance sheet displays a high debt-to-equity ratio of 1.72 for TTM, signaling significant leverage which could pose financial risks. The return on equity of 35.66% for TTM is strong, driven by profitability improvements. However, the equity ratio of 10.59% is relatively low, indicating potential vulnerabilities to financial instability.

Cash Flow

The cash flow analysis reveals a positive trajectory with a substantial operating cash flow to net income ratio of 2.52 for TTM, highlighting strong cash generation capabilities. The free cash flow to net income ratio of 1.05 for TTM reflects effective cash management. However, free cash flow growth has been volatile, with a decrease observed in the recent period.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
15.11B	14.69B	15.53B	14.79B	10.71B	15.52B
	Gross Profit
1.64B	5.39B	5.51B	5.45B	3.12B	5.59B
	EBIT
-3.40B	535.00M	465.00M	492.00M	-1.05B	784.00M
	EBITDA
498.00M	1.05B	1.26B	1.28B	-205.00M	1.64B
	Net Income Common Stockholders
352.00M	134.00M	245.00M	178.00M	-690.00M	496.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
628.00M	628.00M	687.00M	322.00M	681.00M	853.00M
	Total Assets
8.44B	8.44B	8.74B	8.87B	9.54B	9.74B
	Total Debt
4.48B	4.48B	4.64B	4.65B	5.22B	4.79B
	Net Debt
3.85B	3.85B	3.95B	4.33B	4.54B	3.94B
	Total Liabilities
7.60B	7.60B	8.01B	8.29B	9.23B	8.76B
	Stockholders Equity
848.00M	848.00M	739.00M	581.00M	305.00M	979.00M
Cash Flow		Free Cash Flow
370.00M	52.00M	473.00M	199.00M	-733.00M	301.00M
	Operating Cash Flow
885.00M	621.00M	946.00M	705.00M	-348.00M	1.24B
	Investing Cash Flow
-489.00M	-571.00M	-393.00M	-521.00M	-347.00M	-909.00M
	Financing Cash Flow
-374.00M	-109.00M	-186.00M	-544.00M	530.00M	-431.00M

Nordstrom Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 24.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JWN, the sentiment is Neutral. The current price of 24.26 is below the 20-day moving average (MA) of 24.30, above the 50-day MA of 24.20, and above the 200-day MA of 22.59, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 51.87 is Neutral, neither overbought nor oversold. The STOCH value of 19.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JWN.

Nordstrom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TJX	78 Outperform	$136.85B	28.58	59.57%	1.21%	3.95%	―
DDS	75 Outperform	$6.19B	10.57	32.07%	0.27%	-4.13%	-17.60%
BURL	72 Outperform	$14.62B	31.54	17.02%	―	12.18%	60.91%
JWN	67 Neutral	$4.00B	15.46	35.66%	3.13%	3.57%	120.60%
KSS	63 Neutral	$1.27B	5.13	1.64%	17.65%	-4.33%	―
M	63 Neutral	$3.71B	22.47	0.98%	4.96%	-2.68%	-75.81%
Sector *	60 Neutral	$13.01B	10.45	0.79%	3.53%	1.60%	-22.47%

Nordstrom Corporate Events

Nordstrom Reports Strong Q4 2024 Earnings and CFO Departure

On March 4, 2025, Nordstrom, Inc. announced its fourth quarter 2024 earnings, reporting net earnings of $165 million and an EBIT of $242 million. The company saw a 4.7% increase in comparable sales, with strong performance in women’s and men’s apparel. Despite a 2.1% decrease in net sales compared to the previous year’s 14-week period, excluding the 53rd week, sales increased by 2.5%. The company also announced the departure of CFO Cathy Smith and initiated a search for her replacement. Nordstrom’s financial results were bolstered by strategic agility during the holiday season, leading to strong profitability and a positive outlook for stakeholders.

Nordstrom Announces Merger and Executive Retention Program

On December 22, 2024, Nordstrom, Inc. entered into a Merger Agreement with Norse Holdings, Inc., which will result in Nordstrom becoming a wholly-owned subsidiary. To ensure leadership stability through the merger process, Nordstrom has initiated a retention bonus program for named executive officers. This program includes substantial bonuses for key executives, designed to retain them during and after the merger, subject to their continued employment and performance.

Nordstrom Boosts Revenue Outlook After Strong Holiday Sales

Nordstrom, Inc. reported a 4.9% increase in total company net sales and a 5.8% rise in comparable sales for the nine-week holiday period ending January 4, 2025. Based on strong holiday sales, the company has raised its fiscal 2024 revenue growth outlook to 1.5–2.5%, with comparable sales growth expected at 2.5–3.5%, indicating a positive impact on its market positioning and expectations for enhanced profitability.

Nordstrom Announces Merger and Transition to Private Ownership

Nordstrom, Inc. has entered into a merger agreement with Norse Holdings, Inc., which will result in Nordstrom becoming a wholly-owned subsidiary of Norse Holdings. Under the terms of the merger, each share of Nordstrom’s common stock will be converted to $24.25 in cash, marking a premium of approximately 42% over the unaffected share price. The merger aims to enhance shareholder value and is expected to close in the first half of 2025, pending regulatory approval and other conditions. Following the transaction, Nordstrom will be privately owned, with the Nordstrom Family holding a majority stake and El Puerto de Liverpool owning the remainder.