Hot Retail stock to watch: Nordstrom, Inc. (NYSE: JWN)

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Nordstrom, Inc. (NYSE: JWN) stock rose over 8.5% in the pre market session of November 22nd, 2019 (as of 8:54 am GMT-5; Source: Google finance) after the company posted better than expected earnings for the third quarter of FY 19 and raised its 2019 forecast, as it sold more off-price clothing and kept inventories in check. The company’s third-quarter net income has increased to $126 million, compared to $67 million, in the year-ago period. JWN is reducing the fixed cost by realigning the support structure in-stores, making end-to-end process improvements in supply chain and technology and minimizing discretionary spend. Year-to-date, the company have achieved $170 million in savings and anticipate to exceed the plan of $150 million to $200 million for the year.

Meanwhile, JWN in order to attract new customers and retain existing ones, the company has been rolling out concept stores such as “Nordstrom Local,” which holds no stock and serves as pickup points for online orders and returns, while also providing personal styling and tailoring options. For the holidays, JWN intends to expand its gift assortment across full-price and off-price, and will be offering services like free next-day shipping, 24/7 order pickup and complementary gift wrapping

JWM in the third quarter of FY 19 has reported the adjusted earnings per share of 81 cents, beating the analysts’ estimates for the adjusted earnings per share of 64 cents, according to IBES Refinitiv data. The company had reported 2.2 percent fall in the adjusted revenue to $3.67 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue of $3.67 billion. Net sales at its off-price stores rose 1.2%, full price has fallen 4.1% in the third quarter and digital sales grew about 7%. Sales trends have been expanded by more than 200 basis points from the first half of the year. The company saw broad-based improvement across Full-Price and Off-Price, on the back of actions taken by the company related to loyalty, digital marketing and merchandise assortment.

The company has raised the lower-end of its full-year profit to be in the range of $3.30 to $3.50 per share from the prior forecast of $3.25 to $3.50 per share and said the impact of U.S. tariffs would not be significant for the year. The company has maintained the annual expectations for a sales to decrease by approximately 2%. The company expects SG&A dollars to be fall about 1% for the year, when excluding last year’s credit charge. Gross profit rate is projected to be relatively flat.

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