Stock Story -
What Happened: Shares of luxury department store chain Nordstrom (NYSE:JWN) jumped 11.2% in the pre-market session after the company reported a "beat and raise" quarter. Nordstrom blew past analysts' EPS expectations this quarter, while revenue came in slightly ahead. Moving on, it lifted its full-year earnings guidance. Similarly, the company raised the lower end of its full-year guidance for revenue and comparable sales. Zooming out, we think this was a strong quarter that featured some important positives. After the initial pop the shares cooled down to $22.20, up 4.9% from previous close.
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What is the market telling us: Nordstrom’s shares are very volatile and over the last year have had 17 moves greater than 5%. But moves this big are very rare even for Nordstrom and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The previous big move we wrote about was 13 days ago, when the company gained 6.7% as the major indices soared (Nasdaq +1.9%, S&P +1.2%) after Walmart (NYSE:WMT)'s earnings and retail sales data revealed strong consumption patterns in the U.S. economy.
Walmart exceeded analysts' revenue and EPS expectations in Q2'2024.
Moving on, the company raised its full year outlook for net sales and EPS as well, another major positive.
CFO, John David Rainey added "We see, among our members and customers, that they remain choiceful, discerning, value-seeking, focusing on things like essentials rather than discretionary items, but importantly, we don't see any additional fraying of consumer health."
Nordstrom is up 21.3% since the beginning of the year, and at $22.20 per share it is trading close to its 52-week high of $23.82 from July 2024. Investors who bought $1,000 worth of Nordstrom’s shares 5 years ago would now be looking at an investment worth $773.37.
