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Nordstrom Succeeding In A Dying Brick-And-Mortar World

Nordstrom Succeeding In A Dying Brick-And-Mortar World
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Nordstrom, Inc. (NYSE: JWN) is trending up after closing down 0.78 percent on Thursday.

The retailer was up nearly 5 percent in Friday's pre-market session, which could be attributed to the firm's updated guidance. Nordstrom raised its FY15 sales growth guidance from 7-9 percent to 8.5-9.5 percent. The company expects to report an EPS between $3.70 and $3.80 versus the Street estimate of $3.74. It also posted EPS of $0.93 for the quarter, beating the Street's $0.90 estimate.

"I can appreciate the artistry of the Nordstrom store," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "It's classy, it's not overstuffed. There's great architectural design to their stores. I think the best thing for Nordstrom is the brand. They have a high-end shopper but it's not too high."

Udall said he wasn't surprised by Nordstrom's results and that he has personally purchased items from the store. He said its suits compare well to those from Armani and Hugo Boss.

"Most quarters you can guess Nordstrom is going to do pretty well just because of where they are in the food chain," Udall added. "They don't compete with Costco [or] TJ Max, but it's the same sort of superiority. They're one of the long-term winners in the segment."

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'Brick-And-Mortar Company In An Online World'

"With a property like Nordstrom, you're talking about a brick-and-mortar company in an online world," Rob Enderle, principal analyst at Enderle Group, told Benzinga. "Already they're taking a pretty big hit for not being on the trend curve. The fact that they're doing as well as they are is probably more of a surprise than the fact that they're under pressure."

Enderle said that most of the market seems to be moving away from these "brick-and-mortar centralized store models."

"Even Wal-Mart is at risk," he said. "The end result is we're clearly going through the end phase of a consolidation -- if not collapse -- of these traditional brick-and-mortar superstores. The fact that Nordstrom is able to continue to perform here when other chains (like Sears and JC Penney) have been under huge pressure and not doing particularly well -- I think it's a credit to [Nordstrom's] overall execution. However, we have to recognize that they're on the wrong side of the trend."

Shares of Nordstrom are up more than 7 percent over the past 52 weeks.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Image credit: Public Domain

Latest Ratings for JWN

Sep 2016GuggenheimInitiates Coverage onBuy
Aug 2016CitigroupMaintainsNeutral
Aug 2016Deutsche BankMaintainsBuy

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