June 21, 2022

Here’s why Nordstrom (JWN) is poised to beat first-quarter earnings

Nordstrom, Inc.. JWN should come out first quarter of fiscal 2022 numbers on May 24, after the closing bell. The fashion-focused retailer is expected to have posted revenue and profit growth in the quarter ahead.

Although Zacks’ consensus estimate for fiscal first-quarter net income is set at a loss of 9 cents per share, it suggests a substantial 85.9% improvement over the figure reported a year ago. a loss of 64 cents. Additionally, the consensus mark has shrunk by a penny over the past 30 days. The revenue consensus mark is set at $3.33 billion, indicating a 10.6% increase over the figure reported in the prior year quarter.

In the last reported quarter, the company posted an 18.3% profit surprise. In addition, it has generated a profit surprise of 13.9%, on average, over the past four quarters.

Nordstrom, Inc. Awards and EPS Surprise

Nordstrom, Inc. price-eps-surprise | Quote from Nordstrom, Inc.

Key Factors to Note

Nordstrom benefited from strong demand for apparel and footwear, robust digital growth and attractive merchandise. Strength in the home, active, design, beauty and kids categories also bodes well. The company is on track to improve Nordstrom Rack’s performance and improve inventory.

It has focused on advancing technology by boosting e-commerce and digital networks, improving its supply chain channels and marketing efforts. The digital business saw gains from improved digital traffic on Nordstrom and Nordstrom Rack, as well as increased use of the online shopping and in-store pickup service. Its mobile app also worked well. At the same time, the integration of Rack.com into Nordstrom.com should have contributed to the company’s sales in the quarter under review.

The company’s fiscal performance in the first quarter should have benefited from its go-to-market strategy, which helps connect with customers through better service and better access to products regardless of how they purchase. As part of the strategy, Nordstrom expanded its services, including order pickup and in-store shipping, to all Nordstrom Rack stores.

JWN also focused on the proximity strategy, aiming to link stores and services to speed up deliveries, expand online offerings and add less expensive merchandise to its discount stores to improve shopping experiences. customer purchase. An increase in new customers, improved personalization and an expanded product offering likely contributed to the fiscal first quarter performance.

However, the company’s sales and earnings performance were below pre-pandemic levels. JWN has been reeling from rising COVID-related labor and transportation costs. Lack of product availability, order cancellations, shipping delays, increased processing and labor costs are of concern.

What does the Zacks model say?

Our proven model conclusively predicts an earnings beat for Nordstrom this time around. The combination of a positive ESP Earnings and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating gains. You can discover the best stocks to buy or sell before they’re flagged with our Income ESP filter.

Nordstrom has a +54.29% earnings ESP and a #2 Zacks rank.

Other actions with a favorable combination

Here are a few other companies you might want to consider, as our model shows they also have the right combination of elements to perform better this season:

Costco Wholesale Corporation COST currently has an earnings ESP of +1.90% and a Zacks ranking of 2. The Zacks consensus estimate for its third quarter fiscal 2022 earnings is up 0.7% over the past 30 days to hit $3.04 per share, indicating a 10.6% increase over the reported number in the prior year quarter. You can see the full list of today’s Zacks #1 Rank stocks here.

However, Costco’s revenue is expected to have increased year over year. Zacks’ consensus estimate for COST’s quarterly revenue is pegged at $51.76 billion, suggesting 14.3% growth over that reported in the year-ago quarter. COST has posted a 13.3% earnings beat, on average, over the past four quarters.

Attached FAST currently has an earnings ESP of +2.82% and a Zacks ranking of 2. Zacks consensus estimate for its Q2 2022 earnings has been unchanged at 50 cents per share for the past 30 days, which implies a growth of 19.1% compared to the year. the reported number of the previous quarter.

However, Fastenal’s revenue is expected to grow year over year. Zacks’ consensus estimate for quarterly revenue is pegged at $1.78 billion, suggesting an 18.3% increase from the figure reported in the year-ago quarter. FAST has posted a 5% profit beat, on average, over the past four quarters.

Casey General Stores CASY currently has an earnings ESP of +3.73% and a Zacks ranking of 3. The Zacks consensus estimate for its fourth quarter fiscal 2022 earnings has moved north by 2.8% at $1.48 per share over the past 30 days, indicating a 32.1% increase over the reported number in the prior year quarter.

Casey’s revenue is expected to increase year over year. Zacks’ consensus estimate for quarterly revenue is pegged at $3.34 billion, suggesting a 40.4% increase from the figure reported in the year-ago quarter. CASY has recorded a profit pace of 21.6%, on average, over the past four quarters.

Stay up to date with upcoming results announcements with the Zacks Earnings Schedule.

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Fastenal Company (FAST): Free Stock Analysis Report

Nordstrom, Inc. (JWN): Free Stock Analysis Report

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Casey’s General Stores, Inc. (CASY): Free Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.