Nordstrom Shares Take Dive, 5 Analysts Blame 'Cautious Consumer' For 2024 Outlook

Shares of Nordstrom Inc JWN tanked in early trading on Wednesday, even after the company reported upbeat fourth-quarter sales and earnings.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

• Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating, while raising the price target from $17 to $19.
• Piper Sandler analyst Edward Yruma reiterated a Neutral rating, while raising the price target from $17 to $20.
• BMO Capital Markets analyst Simeon Siegel maintained a Market Perform rating and price target of $20.
• Evercore ISI analyst Michael Binetti reaffirmed an In-Line rating and price target of $17.
• Guggenheim Securities analyst Robert Drbul reiterated a Neutral rating on the stock.

Check out other analyst stock ratings.

Telsey: Nordstrom reported its fourth-quarter adjusted earnings of 96 cents per share, beating the consensus estimate, with the upside being driven by better-than-expected topline growth and cost control, Telsey said in a note. The company’s gross margin “came in a bit weaker,” she added.

Management’s fiscal 2024 outlook reflects “a cautious consumer that is mindful of discretionary spend, considering inflation, higher interest rates, and student loan payments,” the analyst further wrote.

Piper Sandler: The company’s quarterly total revenues grew by 2.3% year-on-year to $4.4 billion, “driven by a 14.6% increase in sales at the Nordstrom Rack banner, partially offset by a 3.0% decrease at the Nordstrom banner,” Yruma wrote in a note.

“Nordstrom continued to make progress in aligning inventory levels, but 2024 sales guidance points to continued softness,” the analyst stated. “Early signs point to favorable results from the decision to reacclerate Rack store growth,” he added.
BMO Capital Markets: Nordstrom reported upbeat top- and bottom-line results, although gross margin missed expectations, “with management citing ongoing momentum at Rack while also noting a still cautious consumer environment,” Siegel said.

“Looking ahead, FY EPS was guided just above Consensus at the high-end, but with a history of high-end misses, wide ranges and 2H skew, we believe the onus remains on management execution,” he added.

Evercore ISI: “We estimate that full-price SSS declined -LSD% in Q4 with JWN,” Binetti said. Management’s initial comp and earnings guidance for 2024 were “disappointing,” he added.

“Still-soft traffic trends at the full-line banner and weaker-than-expected GM performance become an even bigger hurdle in 2024 with margin tailwinds rolling off,” the analyst further stated.

Guggenheim Securities: “While Nordstrom saw sequential improvement in the number of customers and purchase trips in Q4, net sales of $4.29 billion came in short of our expectations of $4.34 billion,” Drbul wrote.

With management continuing to work on improving the Rack performance, fourth-quarter sales grew by 14.6%, including a high-single-digit increase on a comparable sales basis, he added.

JWN Price Action: Shares of Nordstrom had declined by 14.64% to $17.84 at last check on Wednesday.

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