Sterne Management Meetings = Lowered Estimates On Nordstrom

Sterne Agee has published a research report on Nordstrom, Inc. JWN after meeting with management in New York City. In the report, Sterne Agee writes "Management emphasized their viewpoint that the shopping experience is being revolutionized by evolving technology, akin to the impact the advent of malls had on the retail landscape. The company intends to continue investing in systems, technology and social media to increasingly personalize the technological experience. The reinvestment likely alters the financial model in the intermediate term, bringing incremental retail EBIT margins to 17-19% on planned sales growth. Sales in excess of plan would likely flow through in the historical 25-35% range. While this will mute EPS growth, management runs the business for the long term and this will likely help strengthen the competitive positioning." The meeting was related to 1) evolving consumer, 2) SG&A reinvestment, 3) incremental EBIT margins, 4) GPM drivers, and 5) sourcing costs and in attendance were Mike Koppel (EVP, CFO), Rob Campbell (Treasurer, IR), Sandy Fabre (IR) and Peter Hutt (Treasury). Sterne Agee maintains its Buy rating and $47 price target. Nordstrom closed Friday at $21.18.