Nordstrom Analyst Remains Cautious On Limited Near-Term Visibility; Expects Growth To Moderate In FY23

Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Nordstrom Inc JWN with a price target of $19.
JWN will report 4Q22 results on Thursday, March 2, after the market close, with a conference call to follow.
In late-January, with less than two weeks left in Q4, Nordstrom reported disappointing holiday sales results and lowered its annual outlook.
The analyst looks for Q4 EPS of $0.74 vs. $1.23 last year. On the topline, the analyst forecasts net revenues to decline 3.5% YoY to $4.328 billion.
The analyst expects retail gross margin contraction of 380 basis points to 34.6% and over 200 basis points of operating margin contraction to 4.5% versus 6.8% last year.
The analyst added that net sales for the nine-week period ending December fell 3.5% YoY as consumers remained selective with spending.
Management noted they continued to see greater resilience in its higher income cohorts, however, all consumers are being more selective in their purchasing given the broader macro environment, said the analyst.
Looking ahead to FY23, the analyst anticipates sales growth to moderate to 2.2% YoY to $15.878 billion, but with profitability to expand relative to FY22.
The analyst is encouraged that JWN took the necessary measures to achieve cleaner inventory heading into FY23, a still choppy retail environment and challenging macro-operating environment in 1H23 cloud visibility to stabilization and, ultimately, improved performance.
With peers' recent results emphasizing continued caution for FY23, the analyst remains cautious about the limited near-term visibility.
Price Action: JWN shares are trading higher by 1.59% at $19.50 on the last check Monday.

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