Nordstrom (JWN) AI Stock Analysis

• Market Cap: $3.97B
• Dividend Yield: 3.19%
• Average Volume (3M): 3.54M
• Price to Earnings (P/E): 13.7
• Beta (1Y): 0.83
• Revenue Growth: 2.20%
• EPS Growth: 120.00%
• Country: US
• Employees: 55,000
• Sector: Consumer Cyclical
• Sector Strength: 55
• Industry: Department Stores
• EPS (TTM): 1.72
• Shares Outstanding: 166,898,470
• 10 Day Avg. Volume: 4,883,251
• 30 Day Avg. Volume: 3,537,229
• PEG Ratio: 0.11
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.27
• 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: $23.91
• Price Target Upside: 0.34% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

Nordstrom's score reflects its operational challenges and high leverage, offset by strong cash flow management and sound market positioning. The stock is fairly valued with a decent dividend yield. Positive recent corporate events enhance the outlook, but the absence of earnings call data limits further insights.

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.

Financial Performance

Nordstrom posted fourth-quarter sales which were slightly above consensus expectations, driven by a 4.7% comparable sales increase and strong holiday demand.

Strategic Execution

The continued strength at both Nordstrom full-price and Nordstrom Rack banners is encouraging for the company's strategic execution.

Negative Factors

Inventory Management

Elevated inventory growth of +11.4% year over year versus net sales down by 2.1% could mean markdown-related gross margin headwinds.

Leadership Stability

The departure of CFO Cathy Smith could signify potential leadership instability, as she will take on a new role at Starbucks.

Risk/Reward Dynamics

The risk/reward is skewed negative as there is only a minimal upside if the deal goes through, but significant downside if it does not.

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 financials show operational challenges, with income statement volatility and declining profitability margins, particularly a significant drop in gross profit margin. However, balance sheet strengths include a high return on equity despite high leverage, and cash flows indicate improved financial management through strong free cash flow growth.

Income Statement

The income statement shows a volatile performance with a significant drop in gross profit margin from previous years. The most recent year reported a gross profit margin of 0.24% compared to 36.67% in the previous year. Net profit margin improved slightly to 1.96% from 0.91% but remains low. Revenue growth is modest at 2.2% year-over-year. The EBIT margin turned negative in the latest year, indicating operational challenges. The EBITDA margin is unavailable due to a zero EBITDA figure.

Balance Sheet

The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 1.46, indicating a high leverage position compared to industry norms. The return on equity is 25.79%, demonstrating efficient use of equity. The equity ratio is low at 12.72%, suggesting potential risk if liabilities increase. The company's ability to manage debt effectively will be crucial going forward.

Cash Flow

Cash flow analysis shows strong operating cash flow to net income ratio of 4.31, indicating effective cash generation relative to net income. Free cash flow improved significantly with a growth rate of 1344.23%, reflecting better capital management. The free cash flow to net income ratio is 2.55, showing robust cash flow relative to earnings. Despite improvements, maintaining this trajectory will be key.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
15.02B	14.69B	15.53B	14.79B	10.71B
	Gross Profit
5.62B	5.39B	5.51B	5.45B	3.12B
	EBIT
0.00	535.00M	465.00M	492.00M	-1.05B
	EBITDA
1.32B	1.05B	1.26B	1.28B	-205.00M
	Net Income Common Stockholders
294.00M	134.00M	245.00M	178.00M	-690.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.03B	628.00M	687.00M	322.00M	681.00M
	Total Assets
8.97B	8.44B	8.74B	8.87B	9.54B
	Total Debt
1.67B	4.48B	4.64B	4.65B	5.22B
	Net Debt
630.00M	3.85B	3.95B	4.33B	4.54B
	Total Liabilities
7.83B	7.60B	8.01B	8.29B	9.23B
	Stockholders Equity
1.14B	848.00M	739.00M	581.00M	305.00M
Cash Flow		Free Cash Flow
751.00M	52.00M	473.00M	199.00M	-733.00M
	Operating Cash Flow
1.27B	621.00M	946.00M	705.00M	-348.00M
	Investing Cash Flow
-488.00M	-571.00M	-393.00M	-521.00M	-347.00M
	Financing Cash Flow
-372.00M	-109.00M	-186.00M	-544.00M	530.00M

Nordstrom Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.83
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 23.83 is below the 20-day moving average (MA) of 24.12, below the 50-day MA of 24.12, and above the 200-day MA of 22.85, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 74.09 is Negative, neither overbought nor oversold. The STOCH value of 92.47 is Negative, 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	77 Outperform	$140.81B	29.59	61.98%	1.19%	3.95%	10.34%
BURL	71 Outperform	$15.55B	31.67	42.55%	―	9.33%	50.05%
DDS	69 Neutral	$5.15B	8.91	33.98%	0.30%	-4.13%	-17.60%
M	69 Neutral	$3.31B	5.74	13.40%	5.93%	-3.60%	442.87%
JWN	64 Neutral	$3.97B	13.68	29.58%	3.19%	2.20%	120.00%
KSS	61 Neutral	$863.87M	7.97	2.83%	20.94%	-7.18%	-65.92%
Sector *	59 Neutral	$11.76B	10.11	-0.70%	3.92%	1.27%	-16.30%

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.