NYSE:JWN

Stock Analysis Report

Executive Summary

Nordstrom, Inc., a fashion retailer, provides apparel, shoes, cosmetics, and accessories for women, men, young adults, and children.

Rewards

Trading at 75.2% below its fair value

Earnings grew by 18.1% over the past year

Pays a high and reliable dividend of 3.67%

Risk Analysis

Earnings are forecast to decline by an average of -1% per year for the next 3 years

Has a high level of debt



Snowflake Analysis

Established dividend payer and good value.


Similar Companies

J. C. Penney Company

NYSE:JCP

Share Price & News

How has Nordstrom's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: JWN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.7%

JWN

1.8%

US Multiline Retail

1.8%

US Market


1 Year Return

-9.4%

JWN

16.6%

US Multiline Retail

20.1%

US Market

Return vs Industry: JWN underperformed the US Multiline Retail industry which returned 16.6% over the past year.

Return vs Market: JWN underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

JWNIndustryMarket
7 Day5.7%1.8%1.8%
30 Day-0.1%-0.9%1.4%
90 Day6.4%-4.2%8.8%
1 Year-5.4%-9.4%19.3%16.6%22.7%20.1%
3 Year-2.1%-11.8%50.4%40.0%50.1%40.4%
5 Year-38.3%-50.7%27.3%11.3%72.9%53.9%

Price Volatility Vs. Market

How volatile is Nordstrom's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Nordstrom undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: JWN ($40.28) is trading below our estimate of fair value ($162.49)

Significantly Below Fair Value: JWN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: JWN is good value based on its PE Ratio (11.5x) compared to the Multiline Retail industry average (12.3x).

PE vs Market: JWN is good value based on its PE Ratio (11.5x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: JWN's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: JWN is overvalued based on its PB Ratio (7.3x) compared to the US Multiline Retail industry average (1.3x).


Next Steps

Future Growth

How is Nordstrom forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

-1.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: JWN's earnings are forecast to decline over the next 3 years (-1% per year).

Earnings vs Market: JWN's earnings are forecast to decline over the next 3 years (-1% per year).

High Growth Earnings: JWN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: JWN's revenue (1.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: JWN's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: JWN's Return on Equity is forecast to be very high in 3 years time (54.3%).


Next Steps

Past Performance

How has Nordstrom performed over the past 5 years?

-8.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: JWN has high quality earnings.

Growing Profit Margin: JWN's current net profit margins (3.6%) are higher than last year (2.9%).


Past Earnings Growth Analysis

Earnings Trend: JWN's earnings have declined by -8% per year over the past 5 years.

Accelerating Growth: JWN's earnings growth over the past year (18.1%) exceeds its 5-year average (-8% per year).

Earnings vs Industry: JWN earnings growth over the past year (18.1%) exceeded the Multiline Retail industry -9%.


Return on Equity

High ROE: Whilst JWN's Return on Equity (64.86%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Nordstrom's financial position?


Financial Position Analysis

Short Term Liabilities: JWN's short term assets ($3.6B) do not cover its short term liabilities ($4.0B).

Long Term Liabilities: JWN's short term assets ($3.6B) do not cover its long term liabilities ($5.2B).


Debt to Equity History and Analysis

Debt Level: JWN's debt to equity ratio (314.8%) is considered high.

Reducing Debt: JWN's debt to equity ratio has increased from 137.3% to 314.8% over the past 5 years.

Debt Coverage: JWN's debt is well covered by operating cash flow (45.7%).

Interest Coverage: JWN's interest payments on its debt are well covered by EBIT (9.2x coverage).


Balance Sheet

Inventory Level: JWN has a high level of physical assets or inventory.

Debt Coverage by Assets: JWN's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

What is Nordstrom's current dividend yield, its reliability and sustainability?

3.67%

Current Dividend Yield


Dividend Yield vs Market

company3.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.4%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: JWN's dividend (3.67%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: JWN's dividend (3.67%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: JWN's dividends per share have been stable in the past 10 years.

Growing Dividend: JWN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.2%), JWN's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: JWN's dividends in 3 years are forecast to be well covered by earnings (47.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

Erik Nordstrom (55yo)

1.1yrs

Tenure

US$4,451,746

Compensation

Mr. Erik B. Nordstrom has been Co-President of Nordstrom Inc. since April 2015 and its Principal Executive Officer since January 10, 2019. Mr. Nordstrom serves as a Member of Executive Team of Nordstrom In ...


CEO Compensation Analysis

Compensation vs Market: Erik's total compensation ($USD4.45M) is about average for companies of similar size in the US market ($USD6.26M).

Compensation vs Earnings: Erik's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Erik Nordstrom
Co-President1.1yrsUS$4.45m1.78% $111.3m
Peter Nordstrom
Co-President & Director14.1yrsUS$4.43m1.79% $112.2m
Anne Bramman
Chief Financial Officer2.7yrsUS$5.17m0.0099% $621.6k
Kenneth Worzel
Chief Operating Officer0.4yrsUS$5.98m0.067% $4.2m
Christine Deputy
Chief Human Resources Officer4.7yrsUS$3.67m0.037% $2.3m
Michael Maher
Chief Accounting Officer0.08yrsno datano data
Trina Schurman
Director of Investor Relations0yrsno datano data
Ann Steines
Executive VP0.6yrsno datano data
Scott Meden
Chief Marketing Officer3.5yrsno data0.041% $2.5m
Teri Bariquit
Chief Merchandising Officer7.5yrsno data0.016% $987.4k

2.7yrs

Average Tenure

53yo

Average Age

Experienced Management: JWN's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Erik Nordstrom
Co-President1.1yrsUS$4.45m1.78% $111.3m
Peter Nordstrom
Co-President & Director14.1yrsUS$4.43m1.79% $112.2m
Bradley Tilden
Independent Director4.1yrsUS$269.21k0.011% $688.5k
Shellye Archambeau
Independent Director5.1yrsUS$255.37k0.0043% $266.4k
Gordon Smith
Independent Director5.1yrsUS$273.91k0.014% $889.9k
Brad Smith
Independent Chairman of the Board1.3yrsUS$348.20k0.019% $1.2m
Tanya Domier
Independent Director5.1yrsUS$262.70k0.011% $659.8k
Kirsten Green
Independent Director1yrsno data0.0033% $205.1k
Stacy Brown-Philpot
Independent Director2.8yrsUS$249.78k0.0022% $138.8k
Brian Turner
Independent Director10.1yrsUS$302.16k0.028% $1.8m

5.1yrs

Average Tenure

55yo

Average Age

Experienced Board: JWN's board of directors are considered experienced (5.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Nordstrom, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Nordstrom, Inc.
  • Ticker: JWN
  • Exchange: NYSE
  • Founded: 1901
  • Industry: Department Stores
  • Sector: Retail
  • Market Cap: US$6.254b
  • Shares outstanding: 155.25m
  • Website: https://shop.nordstrom.com

Number of Employees


Location

  • Nordstrom, Inc.
  • 1617 Sixth Avenue
  • Seattle
  • Washington
  • 98101
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
JWNNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1972
NRDDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972
JWN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1972
0K8JLSE (London Stock Exchange)YesCommon StockGBUSDDec 1972
J1WN34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM NPVBRBRLDec 2019

Biography

Nordstrom, Inc., a fashion retailer, provides apparel, shoes, cosmetics, and accessories for women, men, young adults, and children. It offers a range of brand name and private label merchandise through various channels, such as Nordstrom branded full-line stores and online store at Nordstrom.com; Nordstrom Rack stores; Nordstromrack.com and HauteLook; Jeffrey boutiques; clearance stores that operate under the Last Chance name; Trunk Club clubhouses and TrunkClub.com; and Nordstrom Locals. As of October 24, 2019, the company operated 382 stores in 40 states, including 117 full-line stores in the United States, Canada, and Puerto Rico; 249 Nordstrom Rack stores; 3 Jeffrey boutiques; 2 clearance stores; 6 Trunk Club clubhouses; and 5 Nordstrom Local service concepts, as well as online through Nordstrom.com, Nordstromrack.com, HauteLook, and TrunkClub.com. Nordstrom, Inc. was founded in 1901 and is headquartered in Seattle, Washington. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:48
End of Day Share Price2020/02/14 00:00
Earnings2019/11/02
Annual Earnings2019/02/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.