Nordstrom (JWN) AI Stock Analysis

• Market Cap: $4.05B
• Dividend Yield: 3.12%
• Average Volume (3M): 3.86M
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.75
• Revenue Growth: 2.20%
• EPS Growth: 120.00%
• Country: US
• Employees: 55,000
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Department Stores
• EPS (TTM): 1.10
• Shares Outstanding: 167,234,570
• 10 Day Avg. Volume: 2,799,913
• 30 Day Avg. Volume: 3,858,559
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.84
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.32
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $23.89
• Price Target Upside: -2.05% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

Nordstrom's overall stock score reflects a mix of operational challenges and positive financial management. The financial performance is weighed down by volatile income and high leverage, but strong cash flow improvements and fair valuation support the stock. Technical analysis indicates a neutral trend with potential caution due to overbought indicators. The ongoing legal challenges related to the merger process present a risk, although the company's strategic execution in recent earnings boosts the outlook.

Positive Factors

Financial Performance

Adjusted EPS increased to $1.10, up from $0.96 last year and well above consensus expectations, with solid expense control contributing to the improvement.

Sales Performance

Nordstrom posted fourth-quarter sales which were slightly above consensus expectations, driven by a 4.7% comparable sales increase and strong holiday demand.

Strategic Execution

The continued strength at both Nordstrom full-price and Nordstrom Rack banners is encouraging for the company's strategic execution.

Negative Factors

Deal Uncertainty

There is concern that the Nordstrom deal could be at risk due to the ongoing tariff threat.

Inventory Challenges

Elevated inventory growth of +11.4% year over year versus net sales down by 2.1% could mean markdown-related gross margin headwinds.

Risk/Reward Dynamics

The recommendation for JWN has been downgraded from Neutral to Sell due to unfavorable risk/reward dynamics.

Nordstrom Business Overview & Revenue Model

Company Description

Nordstrom, Inc., a fashion retailer, provides apparels, shoes, beauty, accessories, and home goods 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 stores and online at Nordstrom.com; TrunkClub.com; Nordstrom.ca; Nordstrom stores; Nordstrom Rack stores; Nordstrom Locals; Nordstromrack.com and HauteLook; clearance stores under the Last Chance name; Trunk Club clubhouses; and Jeffrey boutiques. As of December 31, 2021, the company operated 94 Nordstrom stores and 240 Nordstrom Rack stores in the United States; 2 clearance stores; and 7 Nordstrom Local service hubs, as well as 6 Nordstrom stores and 7 Nordstrom Rack stores in Canada. Nordstrom, Inc. was founded in 1901 and is headquartered in Seattle, Washington.

How the Company Makes Money

Nordstrom generates revenue primarily through the sale of apparel, footwear, and accessories in its full-line stores, Nordstrom Rack locations, and e-commerce platforms. The company's key revenue streams include retail sales from its physical stores and online channels, offering a mix of high-end and mid-range products. Additionally, Nordstrom benefits from its Nordstrom Rack division, which helps to clear excess inventory while attracting a value-conscious customer segment. The company also earns income through its credit card operations in partnership with a financial institution, offering loyalty programs that encourage repeat purchases. Nordstrom's focus on customer service, exclusive brand partnerships, and a diverse product offering are significant factors contributing to its financial performance.

Nordstrom Financial Statement Overview

Summary

Nordstrom's financials show operational challenges, with income statement volatility and declining profitability margins, particularly a significant drop in gross profit margin. However, balance sheet strengths include a high return on equity despite high leverage, and cash flows indicate improved financial management through strong free cash flow growth.

Income Statement

The income statement shows a volatile performance with a significant drop in gross profit margin from previous years. The most recent year reported a gross profit margin of 0.24% compared to 36.67% in the previous year. Net profit margin improved slightly to 1.96% from 0.91% but remains low. Revenue growth is modest at 2.2% year-over-year. The EBIT margin turned negative in the latest year, indicating operational challenges. The EBITDA margin is unavailable due to a zero EBITDA figure.

Balance Sheet

The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 1.46, indicating a high leverage position compared to industry norms. The return on equity is 25.79%, demonstrating efficient use of equity. The equity ratio is low at 12.72%, suggesting potential risk if liabilities increase. The company's ability to manage debt effectively will be crucial going forward.

Cash Flow

Cash flow analysis shows strong operating cash flow to net income ratio of 4.31, indicating effective cash generation relative to net income. Free cash flow improved significantly with a growth rate of 1344.23%, reflecting better capital management. The free cash flow to net income ratio is 2.55, showing robust cash flow relative to earnings. Despite improvements, maintaining this trajectory will be key.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
15.02B	14.69B	15.53B	14.79B	10.71B
	Gross Profit
5.62B	5.39B	5.51B	5.45B	3.12B
	EBIT
0.00	535.00M	465.00M	492.00M	-1.05B
	EBITDA
1.32B	1.05B	1.26B	1.28B	-205.00M
	Net Income Common Stockholders
294.00M	134.00M	245.00M	178.00M	-690.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.03B	628.00M	687.00M	322.00M	681.00M
	Total Assets
8.97B	8.44B	8.74B	8.87B	9.54B
	Total Debt
1.67B	4.48B	4.64B	4.65B	5.22B
	Net Debt
630.00M	3.85B	3.95B	4.33B	4.54B
	Total Liabilities
7.83B	7.60B	8.01B	8.29B	9.23B
	Stockholders Equity
1.14B	848.00M	739.00M	581.00M	305.00M
Cash Flow		Free Cash Flow
751.00M	52.00M	473.00M	199.00M	-733.00M
	Operating Cash Flow
1.27B	621.00M	946.00M	705.00M	-348.00M
	Investing Cash Flow
-488.00M	-571.00M	-393.00M	-521.00M	-347.00M
	Financing Cash Flow
-372.00M	-109.00M	-186.00M	-544.00M	530.00M

Nordstrom Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 24.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JWN, the sentiment is Positive. The current price of 24.39 is above the 20-day moving average (MA) of 24.10, above the 50-day MA of 24.12, and above the 200-day MA of 23.10, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 60.00 is Neutral, neither overbought nor oversold. The STOCH value of 84.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JWN.

Nordstrom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DDS	77 Outperform	$5.43B	9.60	33.98%	0.28%	-4.13%	-17.60%
URBN	76 Outperform	$4.80B	12.15	17.56%	―	7.71%	40.01%
M	66 Neutral	$3.20B	5.73	13.40%	5.97%	-3.60%	442.87%
COLM	63 Neutral	$3.49B	15.89	12.34%	1.78%	-1.69%	-4.01%
Sector *	61 Neutral	$6.66B	11.77	3.06%	3.96%	2.60%	-21.54%
JWN	60 Neutral	$4.05B	13.86	29.58%	3.12%	2.20%	120.00%
KSS	58 Neutral	$725.83M	7.25	2.83%	23.02%	-7.18%	-65.92%

Nordstrom Corporate Events

Nordstrom Announces Merger Agreement with Norse Holdings

Nordstrom, Inc. announced a merger agreement with Norse Holdings, Inc., where it will become a wholly-owned subsidiary. As part of the merger, special and stub period dividends may be declared, contingent on the merger’s closing, with a record date set for May 19, 2025. The merger’s completion is subject to shareholder approval and other conditions, with uncertainties around the declaration and payment of dividends.

Spark’s Take on JWN Stock

According to Spark, TipRanks’ AI Analyst, JWN is a Neutral.

Nordstrom’s overall stock score reflects a blend of operational challenges and positive financial management. The financial performance is weighed down by volatile income and high leverage, while technical analysis suggests a neutral trend with caution due to potential overbought conditions. Valuation is fair with a reasonable P/E ratio and attractive dividend yield. Strong Q4 earnings and strategic execution enhance the outlook despite the CFO’s departure.

To see Spark’s full report on JWN stock, click here.

Nordstrom Faces Legal Challenges in Merger Process

On December 22, 2024, Nordstrom entered into a Merger Agreement with Norse Holdings and Navy Acquisition Co., planning to become a wholly-owned subsidiary of Norse Holdings. The merger has faced legal challenges, including a class action lawsuit filed by a Nordstrom shareholder on March 31, 2025, alleging breaches of fiduciary duties and seeking to delay the merger. Despite these challenges, Nordstrom is committed to proceeding with the merger and has made supplemental disclosures to address shareholder concerns, aiming to minimize litigation risks and ensure the transaction’s completion.

Spark’s Take on JWN Stock

According to Spark, TipRanks’ AI Analyst, JWN is a Neutral.

Nordstrom’s overall stock score reflects a blend of operational challenges and positive financial management. The financial performance is weighed down by volatile income and high leverage, while technical analysis suggests a neutral trend with caution due to potential overbought conditions. Valuation is fair with a reasonable P/E ratio and attractive dividend yield. Strong Q4 earnings and strategic execution enhance the outlook despite the CFO’s departure.

To see Spark’s full report on JWN stock, click here.

Nordstrom Reports Strong Q4 2024 Earnings and CFO Departure

On March 4, 2025, Nordstrom, Inc. announced its fourth quarter 2024 earnings, reporting net earnings of $165 million and an EBIT of $242 million. The company saw a 4.7% increase in comparable sales, with strong performance in women’s and men’s apparel. Despite a 2.1% decrease in net sales compared to the previous year’s 14-week period, excluding the 53rd week, sales increased by 2.5%. The company also announced the departure of CFO Cathy Smith and initiated a search for her replacement. Nordstrom’s financial results were bolstered by strategic agility during the holiday season, leading to strong profitability and a positive outlook for stakeholders.