As the Retail Sector Continues to Struggle Nordstrom Is Not Immune

As you may already know, the retail space is getting hammered and stores continue to close at an alarming pace. Nordstrom is a company that sells high end retail goods from clothing to furniture accessories. With the retails space the way it currently is, Nordstrom is struggling and as a result, their stock has recently taken a hit.

Published over a year ago
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Reviewed by Ellen Johnson

Taking a closer look, Nordstrom has a brand image that it sells higher end goods, but this could be a down fall because people are not willing to spend that kind of money if the economy slows. Not only that, many of the items in the retail store can be purchased for cheaper price online, which is a reason why the retail sector is going through this massive change. Stepping into the next level, you will want to look at the fundamental data to ensure they can sustain themselves and minimal store closings are happening.

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Nordstrom income statement, its balance sheet, and the statement of cash flows. Potential Nordstrom investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Nordstrom investors may use each financial statement separately, they are all related. The changes in Nordstrom's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Nordstrom's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Nordstrom fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Nordstrom performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Nordstrom shares is the value that is considered the true value of the share. If the intrinsic value of Nordstrom is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Nordstrom. Please read more on our fundamental analysis page.

How effective is Nordstrom in utilizing its assets?

Nordstrom reports assets on its Balance Sheet. It represents the amount of Nordstrom resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Nordstrom aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Department Stores space. To get a better handle on how balance sheet or income statements item affect Nordstrom volatility, please check the breakdown of all its fundamentals.

Are Nordstrom Earnings Expected to grow?

The future earnings power of Nordstrom involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Nordstrom factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Nordstrom stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Nordstrom expected earnings.

And What about dividends?

A dividend is the distribution of a portion of Nordstrom earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Nordstrom dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Nordstrom one year expected dividend income is about USD0.57 per share.
As of the 23rd of April 2024, Dividends Paid is likely to grow to about 150.3 M, while Dividend Yield is likely to drop 0.02.
Last ReportedProjected for Next Year
Dividends Paid123 M150.3 M
Dividend Yield 0.04  0.02 
Dividend Payout Ratio 0.92  0.35 
Dividend Paid And Capex Coverage Ratio(1.39)(2.00)
Investing in dividend-paying stocks, such as Nordstrom is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Nordstrom must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Nordstrom. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

Nordstrom Gross Profit

Nordstrom Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Nordstrom previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Nordstrom Gross Profit growth over the last 10 years. Please check Nordstrom's gross profit and other fundamental indicators for more details.

Another Outlook On Nordstrom

With all of that in mind, here are a few reasons Nordstrom could pull through these difficult market conditions. First, they are established and sell to the higher end, which may be enough to keep it going. The positive to that wealthy people can typically withstand slow economic conditions because they are finance savvy. Secondly, they have not been in the negative light as much as some stores, which means they could be doing well in readjusting to the new market. That can only be discovered through extensive research, and even then you may not have a clear cut answer. Lastly, their foot print is not as extreme as other stores, which means their brick and mortar locations may survive as they are located in well to do areas.

Now, some of the negative things to watch out for are they do sell high end goods, which means people may limit their purchases if the economy slows or the middle class may eliminate this store all together out of their shopping rotation. Another risk is they may not be able to sustain in these current conditions. You need to be aware if they are updating their online footprint because that seems to be the only way they will be able to make progress as of right now. In general, research if they are making changes to adapt to the recent market space change.

Again, be careful when looking in the retail sector as this is a rough market, but could provide some real value after the dust has settled. There may be a few more stores to close their doors in the future, so be aware it may not be over. Be sure to full research the company and know if your portfolio can handle this kind of risk. If you still have questions, reach out to an investing professional as they can help to point you in the right direction.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Nordstrom. Please refer to our Terms of Use for any information regarding our disclosure principles.

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