Nordstrom (NYSE:JWN) stock has struggled mightily in 2019 in the face of ongoing problems for the broader retail sector. There were murmurs that the company could go private in 2018, but those rumblings have since died down. Shares have plunged 36.8% in 2019 as of close on August 28.
The company released its second quarter 2019 results on August 21. Revenue came in at $3.87 billion, which missed analyst expectations, but it delivered strong adjusted earnings per share of $0.90. This exceeded forecasts and pumped some life into Nordstrom’s floundering stock price.
The stock rose 2.9% on August 28.
Nordstrom cited inventory discipline as the key reason for its solid performance in the second quarter. Inventory was down 6.5% from the prior year as sales at full-price department stores dropped by the same percentage. The company went on to slash its net sales and earnings guidance for the full fiscal year by roughly 2%, casting a shadow over a positive quarter.
Like other retailers, Nordstrom has made a big push to expand its e-commerce offerings. Digital sales rose 7% in the quarter and they represented 30% of the total business. This was up from 28% in Q2 2018.
Shares of Nordstrom boast a favourable price-to-earnings ratio of 9.5 but a high price-to-book of 5.8. The stock is still hovering around 52-week lows and there are simply too many headwinds in the retail sector for me to consider this stock in 2019.
