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Nordstrom (JWN) stock slid recently following an earnings call that disappointed investors and lowered guidance. Moreover the timing of its Anniversary Sale, its biggest annual sales event, indicated that year over year revenue comparisons will be negatively impacted in Q3. At the time of writing, the stock was trading below the 100-day moving average. Despite the recent reports, there is still a fundamental intelligence in the way that Nordstrom runs and plans its business that gives me confidence in its long-term outlook.

1. Multi-Pronged Sales Strategy: In a market where mainstream department stores are making investors jittery and discount resellers seem to be everyone's favorites, Nordstrom has shown the vision to expand both its full price flagship stores as well as its discount Rack business. It plans to open 22 new Rack stores in 2013, expanding its potential to attract a new brand of customer that wants high fashion at a lower price. The company has been investing in its online business and its direct sales have grown 37% in Q2 2013 compared to the same period a year ago. HauteLook, its members-only shopping website, also posted 23% increase year-over-year in the second quarter. Nordstrom is also set to expand its footprint into Canada in 2014 with both full line and Rack stores, with a projected potential sales opportunity of $1 billion. This shows that the company is well positioned to capture a wider variety of customers; those with deeper pockets who like personalized customer service at their full price stores, fashion conscious bargain hunters at their Rack stores, and technology savvy, busy individuals who prefer to shop online.

2. Embracing Change and Technology: The Company has shown an understanding of the changing tastes and expectations of its customers in a number of ways. It has introduced new, trendy product lines such as British fashion brand Topshop and is planning to expand Topshop and Topman to several additional stores this year. The acquisition of HauteLook was another smart move to build a loyal customer base among a younger and "hipper" brand of shoppers who are on the lookout to grab deals on their favorite high end brands.

The company has also been investing in its e-commerce business to continually expand the selection available online and improve the online shopping experience. Another great move has been providing some sales associates with smartphones where they can help customers to checkout, avoiding long lines and having receipts instantly emailed to them.

3. Customer Service: The center of any business is the customer and my experience of Nordstrom stores has been of attentive and courteous customer service. Anecdotally, I have been at its full line store where the sales associates have spent time and effort to find and order items from another location and accommodate special requests. But that is to be expected at a luxury retailer where people on average spend a good amount of money. What sets Nordstrom apart is how it carries that same philosophy across its various channels, depicting a respect for its customer no matter how much or little they spend in the store. The last time I was at a Rack store I saw the store manager encouraging the sales associates to greet and help every customer. One of the sales associates walked up to me and offered to check out my items on her smartphone. Gestures such as these indicate a strong company culture of customer service, which I think is a good sign for long-term growth of the business.

Conclusion

It is not a secret that Nordstrom's recent performance shows weakening sales trends and the near term outlook is lower than previously expected. The broader apparel industry has also been lackluster with investors shying away from it. I think that this weakness is cyclical and likely to persist while income growth is slow and consumers channel spending elsewhere. But in the long term I think that Nordstrom is pointed in the right direction.

Source: Nordstrom - 3 Reasons Why I Still Like It

Additional disclosure: I am a self taught individual investor and this article expresses my views based on my own research. I am long JWN but do not have any other business association with the company. I am not being influenced or paid by any organization to write this article.