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Nordstrom: Sales Trends Expected To Improve Through FY24

Sep. 20, 2023 4:44 PM ETNordstrom, Inc. (JWN) StockDDS, KSS, M8 Comments


  • I recommend a buy rating for JWN based on the expectation of improving sales trends and positive margin trends.
  • Despite challenges during the COVID-19 pandemic, JWN has rebounded to pre-pandemic revenue levels of approximately $15 billion.
  • The company's margin improvements and management's focus on cost management support my confidence in JWN's ability to grow, contrary to the consensus view.

Male Asian customer shopping for sweater on shelfs at departmental store

goc/iStock via Getty Images


My recommendation for Nordstrom (NYSE:JWN) is a buy rating, as I believe sales trends are going to improve from here and that margins will see a similar positive trend supported by improving gross margin and cost management. The variance here

This article was written by

Data scientist turned investment analyst focusing on high tech, high growth companies

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Comments (8)

price for bankruptcy in 2 years here.

Close to 2x ebitda with 42% market cap in cash. Wild. Land valued at $280mm on b/s but probably closer to $1 billion. crazy,
GibraltarAssetMgmt profile picture
bullish when everyone is bearish?
@GibraltarAssetMgmt Everyone else is wrong.
This article is confusing. Couple things, Nordstrom just reported their fiscal 2nd quarter of 2023, three months ending July 29,2023...

It looks like you have fiscal 2022 reported as fiscal 2023. Further, TTM is already in the 14B range and will likely be in the low 14B range at year end .... BUT.... gross margin has significantly improved. The chart also calls out the current share price of 21.77?

DCF with a 3% growth and 3% terminal rate, starting from 14,288 estimated in fiscal 2023YE Rev. (ending jan 2024), With a gross margin (excluding Credit Cards) of 37%, SG&A of 33%, leaves an op income of 4-5%, which is in line with Pre-COVID... gives you a share price of 32.50 (assuming shares are repurchased back down to 160)

The interesting thing is that Nordstrom went into Canada in 2014... Check out how quickly Operating Income % dropped after that. I'm watching Gross Margin & SG&A percentages closely and I like what I am seeing so far....

If net margin returns to 4-5% which I believe may be difficult... shares could be worth somewhere in the low to mid 40s today.
rgtichy profile picture
@JoeT1 "Couple things, Nordstrom just reported their fiscal 2nd quarter of 2023, three months ending July 29,2023..." That should be Fiscal 2024, right? Fiscal Years are named based on the year of the end-date.
LM Investments profile picture
@JoeT1 right, their Canada operation has been unsuccessful and unprofitable. Nordstrom
is pursuing a profitable growth now. I also expect to see its margin improvement .
Was in the other day .sales associate told me lots of top customers no longer spend at icon level or 5 k plus... so maybe just in my market which is a top 20 store.. the Racks uninspired merchandise also will hamper them
@Adam Silber plus exposure to the mess in California
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