Nordstrom Falling Ahead Of Q1 Earnings Report

Shares of Nordstrom, Inc. JWN were down more than 2 percent on Thursday, ahead of the company’s first quarter financial results after the market closes.

As many retailers, Nordstrom’s earnings respond to a cyclical pattern; peak in the fourth quarter and fall enormously in odd quarters, recuperating only slightly in the second quarter.

For the first quarter of 2015, the Street models consensus earnings of $0.71 per share on revenue of $3.154 billion, while the crowd projects earnings of $0.72 per share on revenue of $3.18 billion.

These figures imply zero year-over-year earnings growth, as the company reported earnings of $0.72 per share (on revenue of $2.837 billion) in the first quarter of 2014. Moreover, in the first quarter of 2013, the retailer had reported earnings of $0.73 per share.

The second chart shows how sentiment has evolved over time. The Street’s consensus fell about 10 percent since the beginning of the year, while the crowd’s has been oscillating between $0.72 and $0.73.

Related Link: 4 Retailers Sterne Agee CRT Is Watching In The Heart Of Earnings Season

Mixed Sentiment

In a report issued Monday, analysts at Sterne Agee CRT took a look at four retail stocks they were watching ahead of respective earnings reports, rating all of them a Neutral. The firm modeled first quarter EPS of $0.74.

According to the note, “Sentiment is mixed, with the stock, like several other department stores, coming off its highs (down ~8% since late March) heading into earnings season. As always, the near-term focus is on comps where we don’t see a major divergence from expectations. That said, the Nordstrom story is almost equally about capital allocation considering a myriad of investments (Canada, Manhattan, Trunk Club, Rack) that has constrained EBIT flow-through for some time. To this end, we don’t see a material change in philosophy here – we stay sidelined accordingly.”

The firm issued a Neutral rating and a $70 price target on the stock.