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Here's How Nordstrom (JWN) is Placed Just Ahead of Q1 Earnings

Nordstrom, Inc. JWN is scheduled to release first-quarter fiscal 2023 numbers on May 31, after the closing bell. This fashion specialty retailer is expected to have witnessed revenue and earnings declines in the to-be-reported quarter.

The Zacks Consensus Estimate for fiscal first-quarter loss is pegged at 12 cents per share, suggesting a deterioration from a loss of 6 cents reported in the year-ago quarter. The consensus mark for loss has widened by a penny in the past 30 days. The consensus mark for revenues is pegged at $3.11 billion, indicating a decrease of 12.8% from the figure reported in the year-ago quarter.

In the last reported quarter, the company posted an earnings surprise of 13.9%. Also, it delivered an earnings surprise of 20.7%, on average, in the trailing four quarters.

Nordstrom, Inc. Price and EPS Surprise

Nordstrom, Inc. Price and EPS Surprise
Nordstrom, Inc. Price and EPS Surprise

Nordstrom, Inc. price-eps-surprise | Nordstrom, Inc. Quote

Key Factors to Note

Nordstrom’s first-quarter fiscal 2023 results are expected to reflect the significant impacts of decelerating demand trends. Reduced consumer spending amid lower income groups, stemming from the tough macroeconomic environment, has been hurting revenues across both banners.

Management expects the impact of the winding down of Canada operations to hurt revenues in fiscal 2023. The impacts of the closure are likely to get reflected in the fiscal first-quarter results. We anticipate a 12.6% decline in revenues in the to-be-reported quarter. Moreover, we expect sales to decline 13% for the Nordstrom banner and 13.2% for the Nordstrom Rack segment.

In order to maintain healthy inventory levels, Nordstrom has been undertaking additional markdowns. The higher markdowns have been weighing on gross margin, which is likely to have continued in the to-be-reported quarter.

However, the company is committed to enhancing customer experience via its Closer to You strategy, optimized supply chain and better efficiency. These endeavors are expected to have slightly offset the aforementioned declines.

Nordstrom has been focused on technology advancement by boosting e-commerce and digital networks, supply-chain channel improvement, and marketing efforts. The digital business has been witnessing gains from improved digital traffic across both Nordstrom and Nordstrom Rack, as well as increased utilization of Buy Online, Pick Up In-Store service. Its mobile app has also been performing well. Alongside these, the integration of Rack.com into Nordstrom.com is anticipated to have contributed to the company's top line in the to-be-reported quarter.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Nordstrom this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Nordstrom has an Earnings ESP of -29.31% and a Zacks Rank #4 (Sell).

Stocks With the Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Macy's M currently has an Earnings ESP of +2.81% and a Zacks Rank #3. The company is expected to register top and bottom-line declines when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 46 cents suggests a decline of 57.4% from the year-ago quarter’s reported figure.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Macy’s top line is anticipated to move down year over year. The consensus mark for revenues is pegged at $5.1 billion, indicating a decrease of 4.4% from the figure reported in the year-ago quarter.

lululemon athletica LULU currently has an Earnings ESP of +0.24% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports first-quarter fiscal 2023 numbers. The consensus mark for LULU’s quarterly earnings has moved up 2.1% in the past 30 days to $1.97 per share. The consensus estimate suggests 33.1% growth from the year-ago quarter’s reported number.

The Zacks Consensus Estimate for lululemon’s quarterly revenues is pegged at $1.92 billion, which suggests an increase of 19.3% from the figure reported in the prior-year quarter.

Carnival Corp. CCL currently has an Earnings ESP of +0.42% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2023 results. The consensus mark for CCL’s quarterly revenues is pegged at $4.8 billion, which suggests a rise of 100% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Carnival’s loss has been unchanged in the past 30 days at 34 cents per share. The consensus loss estimate indicates a decline from a loss of $1.64 reported in the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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