February 28, 2016
NYSE: JWN
NORDSTROM INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
$1.48
B-
C+
C
Annual Dividend Yield
2.82%
SELL
C-
D+
D
Beta
0.84
Sector: Consumer Goods & Svcs
JWN BUSINESS DESCRIPTION
Nordstrom, Inc., a fashion specialty retailer, offers
apparel, shoes, cosmetics, and accessories for
men, women, and children in the United States and
Canada. It operates through two segments, Retail
and Credit.
STOCK PERFORMANCE (%)
3 Mo.
Price Change
-9.28
Weekly Price: (US$)
D-
E+
E
E-
F
Market Capitalization
$9.1 Billion
HOLD
52-Week Range
$44.49-$83.16
Sub-Industry: Department Stores
SMA (50)
RATING SINCE
12/31/2015
Price as of 2/25/2016
$52.43
Source: S&P
SMA (100)
1 Year
2 Years
85
80
75
70
65
1 Yr.
-35.43
3 Yr (Ann)
-0.17
60
55
GROWTH (%)
Last Qtr
3.71
-29.42
-24.25
12 Mo.
6.89
-16.67
-14.79
3 Yr CAGR
5.96
-6.54
-3.80
RETURN ON EQUITY (%)
JWN
Q4 2015
68.88
Q4 2014
29.50
Q4 2013
35.28
Ind Avg
22.76
21.86
25.77
S&P 500
12.28
14.59
13.97
Revenues
Net Income
EPS
50
45
Rating History
BUY
HOLD
Volume in Millions
50
25
2014
2015
2016
0
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON
RECOMMENDATION
We rate NORDSTROM INC (JWN) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a
positive or negative performance for this stock relative to most other stocks. The company's strengths can
be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from
operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net
income, generally higher debt management risk and a generally disappointing performance in the stock itself.
16.54
24.33
21.53
JWN
Ind Avg
S&P 500
HIGHLIGHTS
Despite its growing revenue, the company underperformed as compared with the industry average of 5.7%.
Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue does not
appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
EPS ANALYSIS¹ ($)
2013
2014
Q4 1.00
Q2 1.09
Q1 0.66
Q4 1.32
Q3 0.73
Q2 0.95
Q1 0.72
Q4 1.37
Q3 0.69
Q2 0.93
Q1 0.73
Q3 0.42
The company's current return on equity greatly increased when compared to its ROE from the same quarter
one year prior. This is a signal of significant strength within the corporation. Compared to other companies in
the Multiline Retail industry and the overall market, NORDSTROM INC's return on equity significantly exceeds
that of both the industry average and the S&P 500.
2015
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
Net operating cash flow has remained constant at $706.00 million with no significant change when compared
to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the
industry average cash flow growth rate of -14.93%.
The company, on the basis of change in net income from the same quarter one year ago, has underperformed
when compared to that of the S&P 500 and greatly underperformed compared to the Multiline Retail industry
average. The net income has significantly decreased by 29.4% when compared to the same quarter one year
ago, falling from $255.00 million to $180.00 million.
The debt-to-equity ratio is very high at 3.22 and currently higher than the industry average, implying increased
risk associated with the management of debt levels within the company. Along with this, the company
manages to maintain a quick ratio of 0.27, which clearly demonstrates the inability to cover short-term cash
needs.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 1
February 28, 2016
NYSE: JWN
NORDSTROM INC
Sector: Consumer Goods & Svcs Department Stores Source: S&P
Annual Dividend Rate
$1.48
Annual Dividend Yield
2.82%
PEER GROUP ANALYSIS
Market Capitalization
$9.1 Billion
52-Week Range
$44.49-$83.16
Price as of 2/25/2016
$52.43
INDUSTRY ANALYSIS
The multiline retail industry includes very well-known general merchandise and department stores such as
Target (TGT), Dollar General (DG), Macy’s (M), Kohl’s (KSS), Nordstrom (JWN), Dollar Tree (DLTR), Family
Dollar Stores (FDO), Sears Holdings (SHLD), and J.C. Penney (JCP).
REVENUE GROWTH AND EBITDA MARGIN*
300%
SRSC
V
FA
AB
OR
The variety of products offered by multiline retail companies is very diverse. These include but are not limited
to household goods, pharmaceutical drugs, medical supplies, beauty, baby-care, portrait photography, and
cleaning supplies. Also included are music, movies, books, computer software, sporting goods, and toys,
electronics, high fashion to trendy apparel for men and women of all ages from newborn to senior citizen plus
accessories like jewelry and shoes.
LE
These multiline retailers compete with grocery stores by supplying food for people and pets on a more limited
range of dry grocery items as well as dairy, frozen foods, beverages, candies, snacks, deli, bakery, meat, and
fruit.
DLTR
R
VO
FA
BONT
LE
AB
-50%
UN
Revenue Growth (TTM)
Beta
0.84
SHLD
-6%
FRED
BIG JCP
DDSJWN
M
KSS
14%
Other product offerings may include furniture, lighting, kitchenware, small appliances, home decor, bedding,
bathroom items, home improvement, and automotive parts & repair. Unlike online-only retailers, multiline
retail shoppers can browse shelves full of products that they can touch and smell including seasonal
merchandise. Companies sell their products under private-label and exclusively-licensed brands.
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $34.4 Million and $19.3
Billion. Companies with NA or NM values do not
appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
REVENUE GROWTH AND EARNINGS YIELD
300%
SRSC
V
FA
AB
OR
BONT
LE
AB
-50%
R
VO
FA
Revenue Growth (TTM)
LE
UN
DLTR
-120%
JCP
SHLD
FRED
JWN
BIG
DDS
KSS M
Multiline retail companies also profit from the extension of credit to their customers with branded credit
cards.
Companies in this industry are judged based on the metric of same-store sales, a measurement that shows if
stores open for more than one year are increasing top line revenue or shrinking.
PEER GROUP: Multiline Retail
Ticker
JWN
KSS
FRED
BONT
SRSC
DDS
JCP
BIG
DLTR
SHLD
M
Company Name
NORDSTROM INC
KOHL'S CORP
FREDS INC
BON-TON STORES INC
SEARS CANADA INC
DILLARDS INC
PENNEY (J C) CO
BIG LOTS INC
DOLLAR TREE INC
SEARS HOLDINGS CORP
MACY'S INC
Recent
Price ($)
52.43
46.67
14.74
1.89
2.75
82.22
8.36
39.84
82.30
17.52
43.37
Market
Cap ($M)
9,097
8,859
550
34
280
2,689
2,558
1,974
19,324
1,869
13,458
Price/
Earnings
16.54
13.33
NM
NM
NM
11.90
NM
14.87
66.91
NM
13.18
Net Sales
TTM ($M)
14,437.00
19,204.00
2,100.55
2,802.61
3,230.60
6,722.48
12,522.00
5,199.96
12,608.70
25,146.00
27,079.00
Net Income
TTM ($M)
600.00
673.00
-11.62
-35.89
-222.40
269.27
-501.00
142.77
259.90
-1,129.00
1,072.00
The peer group comparison is based on Major Department Stores companies of comparable size.
20%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -19.4% and
287.1%. Companies with NA or NM values do not
appear.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 2
February 28, 2016
NYSE: JWN
NORDSTROM INC
Sector: Consumer Goods & Svcs Department Stores Source: S&P
Annual Dividend Rate
$1.48
Annual Dividend Yield
2.82%
COMPANY DESCRIPTION
Nordstrom, Inc., a fashion specialty retailer, offers
apparel, shoes, cosmetics, and accessories for men,
women, and children in the United States and Canada. It
operates through two segments, Retail and Credit. The
Retail segment offers a selection of brand name and
private label merchandise through various channels,
including Nordstrom branded full-line stores and online
store at Nordstrom.com; Nordstrom Rack stores;
Nordstromrack.com and HauteLook; and other retail
channels, including Trunk Club showrooms and
TrunkClub.com, Jeffrey boutiques, and clearance store
that operates under the name Last Chance. The Credit
segment operates Nordstrom fsb, a federal savings bank,
which provides a private label credit card, two
Nordstrom VISA credit cards, and a debit card. Its credit
and debit cards feature a shopping-based loyalty
program. As of February 11, 2016, the company operated
323 stores in 39 states, including 121 full-line stores in
the United States, Canada, and Puerto Rico; 194
Nordstrom Rack stores; 2 Jeffrey boutiques; and 1
clearance store. Nordstrom, Inc. also sells its products
through catalogs. The company was founded in 1901 and
is based in Seattle, Washington.
NORDSTROM INC
1617 Sixth Avenue
Seattle, WA 98101
USA
Phone: 206-628-2111
http://www.nordstrom.com
Beta
0.84
Market Capitalization
$9.1 Billion
52-Week Range
$44.49-$83.16
Price as of 2/25/2016
$52.43
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of JWN shares. It is provided in order to give you a deeper understanding of our
rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
4.0
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, JWN has a growth score better than 70% of
the stocks we rate.
strong
2.0
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 30% of the companies we
cover.
strong
5.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 90% of the companies we review.
strong
2.0
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 30% of the stocks we monitor.
strong
2.0
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 30% of the companies we analyze.
strong
4.0
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. The company's
dividend is higher than 70% of the companies we track.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 3
February 28, 2016
NYSE: JWN
NORDSTROM INC
Sector: Consumer Goods & Svcs Department Stores Source: S&P
Annual Dividend Rate
$1.48
Annual Dividend Yield
2.82%
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
0.46
Q1 FY16
3.21 E
3.55 E
2017(E)
2018(E)
Beta
0.84
Market Capitalization
$9.1 Billion
52-Week Range
$44.49-$83.16
Price as of 2/25/2016
$52.43
FINANCIAL ANALYSIS
NORDSTROM INC's gross profit margin for the fourth quarter of its fiscal year 2015 has decreased when
compared to the same period a year ago. Even though sales increased, the net income has decreased,
representing a decrease to the bottom line. NORDSTROM INC has very weak liquidity. Currently, the Quick
Ratio is 0.27 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has
decreased from the same period last year.
At the same time, stockholders' equity ("net worth") has significantly decreased by 64.30% from the same
quarter last year. The key liquidity measurements indicate that the company is in a position in which financial
difficulties could develop in the near future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q4 FY15
4,193.00
476.00
324.00
180.00
Q4 FY14
4,043.00
597.00
465.00
255.00
Q4 FY15
595.00
7,698.00
2,805.00
871.00
Q4 FY14
827.00
9,245.00
3,131.00
2,440.00
Q4 FY15
39.23%
11.35%
7.73%
1.88
7.79%
68.88%
Q4 FY14
41.58%
14.76%
11.50%
1.46
7.78%
29.50%
Q4 FY15
1.04
0.76
31.00
10.45
Q4 FY14
1.87
0.56
34.00
13.68
Q4 FY15
174
0.37
1.00
5.02
NA
4,193,538
Q4 FY14
190
0.33
1.32
12.84
NA
2,430,406
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 4
February 28, 2016
NYSE: JWN
NORDSTROM INC
Sector: Consumer Goods & Svcs Department Stores Source: S&P
Annual Dividend Rate
$1.48
Annual Dividend Yield
2.82%
RATINGS HISTORY
Our rating for NORDSTROM INC was recently
downgraded from Buy to Hold on 12/31/2015. As of
2/25/2016, the stock was trading at a price of $52.43
which is 37.0% below its 52-week high of $83.16 and
17.8% above its 52-week low of $44.49.
HOLD: $49.81
BUY: $59.23
2 Year Chart
3
From
Buy
Buy
To
Hold
Buy
(as of 2/25/2016)
32.19% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
35.29% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
32.52% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
Price as of 2/25/2016
$52.43
4
5
1
2
3
4
5
1
2
3
premium
4
5
Price/Sales
1
2
premium
3
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
JWN 9.51
Peers 13.24
• Discount. The PEG ratio is the stock’s P/E divided
by the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• JWN trades at a significant discount to its peers.
Earnings Growth
1
2
3
4
lower
5
higher
JWN -14.79
Peers 4.96
• Lower. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• However, JWN is expected to significantly trail its
peers on the basis of its earnings growth rate.
Sales Growth
discount
JWN 0.63
Peers 0.82
• Discount. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• JWN is trading at a discount to its industry on this
measurement.
3
JWN 3.71
Peers 13.15
• Discount. The P/CF ratio, a stock’s price divided by
the company's cash flow from operations, is useful
for comparing companies with different capital
requirements or financing structures.
• JWN is trading at a significant discount to its
peers.
discount
JWN 10.44
Peers 4.05
• Premium. A higher price-to-book ratio makes a
stock less attractive to investors seeking stocks
with lower market values per dollar of equity on the
balance sheet.
• JWN is trading at a significant premium to its
peers.
2
premium
discount
JWN 14.77
Peers 18.91
• Discount. A lower price-to-projected earnings ratio
than its peers can signify a less expensive stock or
lower future growth expectations.
• JWN is trading at a discount to its peers.
Price/Book
1
Price/CashFlow
discount
premium
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
2
JWN 16.54
Peers 24.33
• Discount. A lower P/E ratio than its peers can
signify a less expensive stock or lower growth
expectations.
• JWN is trading at a significant discount to its
peers.
Price/Projected Earnings
Price reflects the closing price as of the date listed, if available
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
1
premium
$80
52-Week Range
$44.49-$83.16
VALUATION
HOLD. This stock's P/E ratio indicates a discount compared to an average of 24.33 for the Multiline Retail
industry and a discount compared to the S&P 500 average of 21.53. For additional comparison, its
price-to-book ratio of 10.44 indicates a significant premium versus the S&P 500 average of 2.56 and a
significant premium versus the industry average of 4.05. The current price-to-sales ratio is well below the
S&P 500 average and is also below the industry average, indicating a discount. The valuation analysis reveals
that, NORDSTROM INC seems to be trading at a discount to investment alternatives within the industry.
Price/Earnings
2015
MOST RECENT RATINGS CHANGES
Date
Price
Action
12/31/15
$49.81 Downgrade
2/25/14
$59.23 No Change
Market Capitalization
$9.1 Billion
$100
$60
2014
Beta
0.84
1
2
3
lower
4
5
higher
JWN 6.89
Peers 10.14
• Lower. A sales growth rate that trails the industry
implies that a company is losing market share.
• JWN significantly trails its peers on the basis of
sales growth
DISCLAIMER:
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 5