Nordstrom Inc. (JWN), the upscale department store operator, is slated to report its fourth-quarter and fiscal 2013 results after the market closes on Feb 20, 2014. In the last quarter, it posted a positive surprise of 4.6%. Let’s see how things are shaping up for this announcement.
Factors this Past Quarter
Though Nordstrom delivered better-than-expected third-quarter fiscal 2013 earnings results, on a year-ago comparable basis earnings declined due to a negative impact from the shift of Anniversary Sale event to the second quarter. However, the company’s revenue increased based on an improvement in retail sales as well as credit card revenues. Comparable store sales remained positive driven by improved full-line and Rack store comps. Women’s Apparel, Women’s Shoes, and Cosmetics continued to witness growth as compared with the prior-year period.
Earnings Whispers?
Our proven model does not conclusively show that Nordstrom is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. This is not the case here, as you will see below.
Negative Zacks ESP: ESP for Nordstrom is -1.50%. This is because the Most Accurate estimate stands at $1.31, while the Zacks Consensus Estimate is pegged at $1.33.
Zacks Rank #4 (Sell): Nordstrom’s Zacks Rank #4 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows they have the right combination of elements:
AutoZone Inc. (AZO) Earnings ESP stands at 1.99% and it carries a Zacks Rank #2 (Buy).
Foot Locker Inc. (FL) with an Earnings ESP of 8.00% holds a Zacks Rank #2 (Buy).
Finish Line Inc. (FINL) has an Earnings ESP of 2.35% and a Zacks Rank #2 (Buy).
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