Is JWN Stock a Buy, Hold or Sell Post Holiday Sales Results?

Core Insights - Nordstrom, Inc. reported a strong holiday sales performance, with total net sales increasing by 4.9% and comparable sales rising by 5.8% for the nine-week period ending January 4, 2025, compared to the previous year [2][6] - The company has raised its full-year sales outlook for fiscal 2024, anticipating revenue growth of 1.5% to 2.5% compared to fiscal 2023, despite the absence of a 53rd week impacting the top line by 135 basis points [6][7] - Nordstrom Rack showed particularly strong performance, with net sales increasing by 7.4% and comparable sales growing by 4.3%, indicating solid results in the off-price segment [3][4] Sales Performance - For the Nordstrom banner, net sales grew by 3.7% and comparable sales rose by 6.5%, driven by strong customer demand [3][4] - The overall holiday results exceeded the company's cautious expectations, attributed to increased consumer engagement and effective sales strategies [2][4] Strategic Initiatives - Nordstrom is enhancing its digital capabilities and leveraging technology to streamline operations, improve inventory management, and provide seamless shopping experiences [5][12] - The company is focused on a long-term strategy that capitalizes on its digital-first platform to better serve customers and gain market share [5][12] Earnings Estimates - Analysts have revised their earnings estimates upward, with the current quarter's estimate increasing by 2 cents to $1.97 per share and the next quarter's estimate also rising by 2 cents to$2.00 per share [8][9] - The Zacks Consensus Estimate for current and next quarter's sales is projected at $14.96 billion and$15.14 billion, respectively, indicating year-over-year growth of 1.8% and 1.2% [9] Valuation and Stock Performance - Nordstrom's stock is trading at a forward 12-month price-to-earnings ratio of 12.09, below the industry average of 19.20, suggesting it is undervalued compared to peers [15] - Over the past six months, Nordstrom's stock has increased by 14.7%, outperforming the S&P 500 index's growth of 12.8% but lagging behind the industry's growth of 29.5% [17] Growth Drivers - Key growth drivers include the strong performance of Nordstrom Rack, strategic efforts to increase brand penetration, and improved alignment of offerings with customer demand [11][12] - Ongoing investments in supply chain optimization and inventory efficiency are expected to support profitable growth and long-term shareholder value [12][14]