Nordstrom's Earnings Loom, Will It Stave Off The Retail Apocalypse?
Thinknum | Aug 20, 2019 12:39PM ET
Clothing behemoth Nordstrom (NYSE:JWN) is looking to stay aggressive despite an earnings call this week that could bring some bad news for shareholder value. The Seattle-based company wants to stay ahead of declining social trends and sliding stock prices by maintaining a high discount rate to stay afloat in a tumultuous industry where online shopping has reigned supreme.
In response to some notable store closings at malls and elsewhere around the country, Nordstrom (NYSE:JWN) focused on quality over quantity (there were at one point 400 stores in 40 states in the U.S. but those numbers are dwindling). With competition from a new Neiman Marcus at Hudson Yards, Macy’s at Herald Square and other competitors, Nordstrom is set to open more local stores for online pick-up, as well as a new hub in New York City.
The following data shows the increased floor Nordstrom (NYSE:JWN) is willing to maintain to keep potential buyers engaged. They haven’t dipped beneath 35% on average discounts across their inventory since earlier this year, a move that signals to us that they want people to not only visit their stores but to buy something once they’re in there.
If Nordstrom (NYSE:JWN) is willing to take the hit on selling clothes at nearly 40% off so often, that means they want to shrug off the notion they’re too much of a high-priced luxury brand for the average consumer.
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After years of ownership, it seems that Trunk Club and Hautelook aren't paying off when it comes to social media attention. Engagement on Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR), especially when it relates to foot traffic (Were Here counts) aren't trending upwards. If people aren’t mentioning these brands often, they might not necessarily buy products. And that is what Nordstrom (NYSE:JWN) needs more people to do: buy more of their inventory, even if that means directing them away from the mall or outlet stores and opting for online service.
The only concern apart from these social trends is the retail-wide stock hit many stores face. Nordstrom (NYSE:JWN) is not invulnerable to the same woes that affect Macy’s (NYSE:M), JC Penney (NYSE:JCP) and Sears (OTC:SHLDQ). The company will announce earnings August 21 and analysts tracked by Zacks Investment Research have downgraded expectations, looking for $0.76 per share.
About The Data:
Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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