Nordstrom gains 10% following optimism of the Q3 earnings report

The American chain of luxury department stores, Nordstrom, announced its Q3 earnings report on Thursday. Having hit the target for revenue in the third quarter and beaten the analysts estimate for earnings per share, the share prices were reported to have gained 10% during the after-hours trading on Thursday. As of Friday, the stock had lost a little bit but was still last seen trading around 8% higher.

Nordstrom’s Performance In The Stock Market In 2019

The stock opened at $37.05 on Friday. Trading almost sideways in the first session, the stock slumped to $34.32 in the second session. The loss was, however, regained immediately with share prices rising back to around $38.00 later in the day. It closed the week at $37.90 and remained flat in extending trading on Friday.

2019 has so far been a difficult year for Nordstrom. The stock was seen trading at $47.48 at the start of the year. Remaining downbeat for 8 consecutive months, it printed a year-to-date low of around $25.00 in August. While it has recovered back to around $38.00, analysts are not too positive for it to finish the year higher than the opening level.

Based on Refinitiv’s survey, analysts had forecasted $3.67 billion in revenue for Nordstrom in the third quarter of 2019. As per the earnings report, revenue was aligned with the forecast and printed at $3.67 billion. The estimate for earnings per share (EPS) was highlighted at 64 cents per share. Nordstrom, however, significantly beat the expectations for EPS and noted 81 cents of earnings per share in 2019’s Q3.

Nordstrom’s Sales Have Dropped By 2.2% Year-Over-Year

Despite better than expected results, sales for Nordstrom have dropped by 2.2% year-over-year. Following the earnings report, Nordstrom narrowed its EPS estimate for the fiscal year 2019 to $3.30 to $3.50 per share. The luxury department store, however, noted a sharp increase in net income to $126 million from the last year’s $67 million. Total revenue of $3.67 billion for the company in the third quarter, though aligned with the analysts’ forecast, was reported to be lower than $3.75 billion printed in 2018.

In 2018’s third quarter, digital sales contributed to 31% of total sales for Nordstrom. The figure has improved to 34% this year representing that the stores’ digitalization efforts are paying off. The company has launched its very first New York-based flagship women’s store last month as well. Sales from the new store, however, are likely to contribute to the results for the fourth quarter, as per Nordstrom’s representative.