The Seattle-based Nordstrom said that it earned $143 million, or 65 cents per share, in the quarter ended Aug. 2, compared to $180 million, or 71 cents per share, in the same period of the previous year. Total sales fell 4.3% to $2.29 billion. Analysts surveyed by Thomson Reuters had expected earnings of 64 cents per share on revenue of $2.31 billion.
Nordstrom also reported a 6% drop in same-store sales and said that results would continue to be challenging. The company said it now expects earnings per share for its fiscal year to be between $2.55 to $2.65 per share. That's down from the previous forecast of $2.65 to $2.80 per share. Analysts surveyed by Thomson Reuters expect net income of $2.68 per share for the year.
Shares rose 4.37% Friday to close at $31.54. Shares are down 14.1% year to date.
U.S. stock futures were higher Friday morning, indicating stock markets could possibly extend Thursday's rally as the dollar rose and oil prices fell further. The dollar continues to make gains on the back of growing evidence of global economic softness. Still, several economic readings are due out today, including the New York Empire State manufacturing index , capacity utilization and industrial production -- all before the opening bell.
Kohl's Corp shares could start higher as premarket indication has them trading 2.3% higher, while Nordstrom's are trading 4% lower in premarket action. Kohl's quarterly profit fell 12% from a year ago, but the retailer lifted its fiscal year profit forecast. Meanwhile, upper scale Nordstrom, reported a 21% drop in second-quarter profits and cut full year outlook.
ANF said second-quarter profit fell on lower sales of jeans and T-shirts and forecast full-year earnings per share that trailed some analysts' estimates. JCP also saw profit decline but beat estimates and issued lower guidance.
Autodesk (NASDAQ: ADSK) shares are trading 10% higher in premarket action after the design software maker reported stronger-than-forecast second-quarter earnings Thursday after the close.
Nordstrom (NYSE: JWN) is expected to report Q2 EPS today after the market close. JWN August 30 straddle is priced at $2.90, September 30 is at $4.40. JWN September option implied volatility of 58 is above its 26-week average of 52 according to Track Data, suggesting larger price movement.
Red Robin Gourmet (NASDAQ: RRGB) is scheduled to report Q2 EPS today. RRGB August 30 straddle is priced at $2.60, September is at $5.15. RRGB September option implied volatility of 64 is above its 26-week average of 52 according to Track Data, suggesting larger price movement.
Heelys (NASDAQ: HLYS) is recently up 68 cents to $5.55 in pre-open trading. Skechers (NYSE: SKX) made an acquisition proposal to acquire HLYS for $5.25 per share ($142 million) in cash. HLYS, wheel-in-the-heel footwear marketer, closed at closed at $4.87. HLYS traded at a record high of $40.09 in February 2007. HLYS over all option implied volatility of 77 is near its 26-week average according to Track Data, suggesting non-directional price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
The mall itself, which is scheduled to reopen in the fall of 2009, is seeing a major renovation from an enclosed shopping center to a three-level, 550,000-square-foot open-air retail plaza linking to the Third Street Promenade.
Leading fashion specialty retailer Nordstrom has signed a letter of intent to open a three-level, 122,000-square-foot store in the fall of 2010. "The extraordinary appeal of Nordstrom is a great match for this exceptional market, and for what we believe will be a one-of-a-kind retail project two blocks from the beach in downtown Santa Monica," Randy Brant, executive vice president, real estate, for Macerich stated.
Some of the country's largest retail chains had good June sales, benefitting from consumers looking for a place to spend their tax rebates, but this was not the case for higher-priced department stores. Retailers offering big discounts were among the privileges ones as consumers chose to stay away from high prices.
Consumers spent on the basics, looking for bargains, boosting sales at some companies like Wal-Mart (NYSE: WMT), but resulting in losses for the others like Nordstrom (NYSE: JWN) and American Eagle (NYSE: AEO). This confirmed that retailers will face further weak demand even during the back-to-school shopping season, and more deep discounts will be needed.
As June is considered a key month for sales, merchants were hoping for a "stimulus" effect from tax rebates, despite worries tied to soaring gasoline and food costs. However, only companies offering cheaper gas like Wal-Mart, Costco (NASDAQ: COST) and BJ's Wholesale Club (NYSE: BJ) saw their dreams accomplished. Thus, Wal-Mart came with June sales growth of 4.3%, Costco reported a 9% increase in June same-store sales, while BJ's Wholesale saw a growth of 16.5%.
After hitting a one-year high of $53.47 in August, the stock hit a one-year low of $28.00 in January. This morning, JWN opened at $29.75. So far today the stock has hit a low of $27.69 and a high of $30.15. As of 12:10, JWN is trading at $28.90, down 2.34 (-7.5%). The chart for JWN looks neutral but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $35 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in five weeks as long as JWN is below $35 at August expiration. Nordstrom would have to rise by more than 20% before we would start to lose money. Learn more about this type of trade here.
JWN has been above $35 as recently as early June but has shown resistance around $32.50 recently. This trade could be risky if the company's earnings (due out on 8/14) are a positive surprise, but even if that happens, this position could be protected by resistance JWN might find at its 50-day moving average, which is currently around $34 and falling.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in JWN.
On Thursday, Nordstrom Inc. (NYSE: JWN) and Kohl's Corp. (NYSE: KSS) both reported smaller-than-expected first-quarter profit declines as consumers continued to pull back their spending.
Luxury retailer Nordstrom said its profit fell 24% from the same quarter of last year to $119 million, or 54 cents per share. Revenue fell 4% from a year ago to $1.88 billion. Analysts surveyed by Thomson Financial had predicted Nordstrom would earn 49 cents per share on sales of $1.9 billion.
The company said same-store sales fell 6.5% for the quarter, below the expected 3% to 5% drop. The retailer said it expects same-store sales to fall 5% to 7% in the quarter, and 4% to 6% in the year.
For the current quarter, Nordstrom forecast a profit of 65 to 70 cents per share; analysts' forecast earnings of 69 cents per share. For the full year, Nordstrom cut its earnings outlook to $2.65 to $2.89 per share, from an earlier forecast for $2.75 to $2.90 per share. Analysts predict earnings of $2.76 per share.
By mid day Friday, shares of Nordstrom had gained $1.35, or 3.5%, from the open on Thursday. Shares have fallen 28.7% in the past year.
MOST NOTEWORTHY: The Department store sector, SanDisk and CNET Networks were today's noteworthy downgrades:
Goldman downgraded the department store sector to Neutral from Attractive after raising its 2008 oil forecast to $149 from $115, as it believes higher gas prices will impact consumer discretionary spend and sentiment. Goldman downgraded JC Penney (NYSE: JCP) and Nordstrom (NYSE: JWN) to Neutral and also removed Kohl's (NYSE: KSS) from its Conviction Buy List.
JMP Securities downgraded SanDisk (NASDAQ: SNDK) to Underperform from Market Perform based on increased competition in NAND, a potential decline in royalty income, valuation, and lack of catalysts from flash-based solid state drives.
CNET Networks (NASDAQ: CNET) was cut to Neutral from Buy at Banc of America following the tender offer from CBS (NYSE: CBS).
Goldman Sachs cut its view of U.S. department stores to Neutral from Attractive. Specifically, the broker downgraded J.C. Penney (NYSE: JCP) and Nordstrom Inc. (NYSE: JWN) to Neutral from Buy after its commodity team upped 2008 oil price forecasts to $149 a barrel. Still, Goldman upgraded TJX Cos. (NYSE: TJX) to Buy from Neutral and removed Kohl's Corp. (NYSE: KSS) from its conviction-buy list in favor of Wal-Mart Stores Inc. (NYSE: WMT).
By now I'm getting confused with all the deals Apple Inc. (NASDAQ: AAPL) is signing with wireless operators to sell the iPhone in different countries around the world. I believe the past two weeks we heard of at least two deals, including one with a S.Korean company. Today, French wireless operator Orange said it has signed a deal to sell its iPhone in the Middle East, Africa and several European countries. Orange will be the exclusive iPhone provider in Belgium and Romania. It seems that by now Apple's got the world covered.
General Motors Corp. (NYSE: GM) is apparently considering launching its Chevrolet brand in South Korea. In its attempt to stay ahead of fast growing Toyota (NYSE: TM), GM will try to capture a larger share of S.Korea's growing market for imported cars.
Goldman Sachs cut the ratings on J.C. Penney (NYSE:JCP) and Nordstrom (NYSE:JWM) from "buy" to "neutral" due to the rising price of oil, according toMarketWatch.
Morgan Stanley began CostCo (NASDAQ:COST) at "equal weight" according toBriefing.com. The news service also reports that JPM downgraded Sandisk (NASDAQ:SNDK) from "market perform" from "underperform".
Douglas A. McIntyre is an editor at 247wallst.com.
U.S. stock futures were higher this morning, looking to extend their rally, even though investors will likely not like the upcoming housing data, which probably isn't going to signal a bottom for the housing recession.
U.S. stocks had a nice rally Thursday as oil prices fell, several deals were announced, mainly CBS buying CNet, and Icahn moving forward with his proxy fight for Yahoo's board. The Dow industrials rose 94 points, or 0.73%, the S&P 500 added 14 points, or 1.06%, and the Nasdaq Composite rose 37 points, or 1.48%. Thursday marked the fourth day of gains for the Nasdaq.
This morning, investors will be waiting for the housing data to roll in. Housing starts and building permits figures for April will be reported at 8:30 a.m. EDT. Both are expected to show further declines. Also at 10:00 a.m. EDT, May University of Michigan's consumer confidence gauge for May is due. Economists expect it to decline marginally.
Meanwhile, Goldman Sachs helped lift oil prices this morning after it raised its forecast for oil to $141 a barrel. The forecast was raised 32% from $107 a barrel and is for the second half of 2008. Oil prices were back above $125 a barrel.
U.S. stock futures were marginally higher early Thursday morning as once again investors await data on the economy to give them direction. Several deals and earnings are also in the spot light this morning.
U.S. stocks received a boost Wednesday from lower-than expected inflation numbers, given extra credence by the fall in crude-oil prices. While most companies reporting earnings Wednesday didn't proved good news, a smaller-than-forecast loss for Freddie Mac helped lift sentiment. The Dow industrials rose 66 points, or 0.52%, the S&P 500 rose 6 points, or 0.40%, and the Nasdaq Composite edged up more than a point, or 0.06%.
This morning, more inflation data is due out. Consumer level inflation reported Wednesday managed to surprise the Street, but can the economic releases today do the same? At 8:30 a.m., weekly initial jobless claims will be released, as well as May NY Empire State Index. At 9:00 a.m., March Net Foreign Purchases will be reported to be followed some time later with April capacity utilization and industrial production. At 10:00 a.m., after the market opens, the Philadelphia Fed index is due and is expected to show another decline. Finally, a housing index is also due today.
The Seattle-based Nordstrom said that it earned $143 million, or 65 cents per share, in the quarter ended Aug. 2, compared to $180 million, or 71 cents per share, in the same period of the previous year. Total sales fell 4.3% to $2.29 billion. Analysts surveyed by Thomson Reuters had expected earnings of 64 cents per share on revenue of $2.31 billion.
U.S. stock futures were higher Friday morning, indicating stock markets could possibly extend Thursday's rally as the dollar rose and oil prices fell further. The dollar continues to make gains on the back of growing evidence of global economic softness. Still, several economic readings are due out today, including the New York Empire State manufacturing index , capacity utilization and industrial production -- all before the opening bell.
Nordstrom
Some of the country's largest retail chains had good June sales, benefitting from consumers looking for a place to spend their tax rebates, but this was not the case for higher-priced department stores. Retailers offering big discounts were among the privileges ones as consumers chose to stay away from high prices.
On Thursday, .gif){kind=logo}
Stocks have their worst week in six years
Why haven't the Republicans said much about the economy?
Chasing Value: Are you watching WaMu?
