Fashion retailer Nordstrom (NYSE:JWN) has seen its stock price more than triple from late-2020 levels. It appears the announcement of vaccines to combat the coronavirus pandemic, as well as the eventual swearing in of Biden tomorrow, has investors in this stock bullish about the future.
This has to be the case, considering the results the company posted recently. An overall sales decline of more than 20% for the holiday season did not bring much in the way of optimism for me about the near-term prospects for this company. Fashion retail is a difficult business, now more than ever, and I think more weakness could be on the horizon as consumers shift mainly to online platforms for clothing, more than ever.
That said, e-commerce growth was a bright spot for Nordstrom in its earnings release. The company showed 23% growth in this segment, with more than half of the company’s total holiday sales coming from its e-commerce platform. This is indeed bullish long-term, and suggests the company has a number of cost-cutting measures available such as right-sizing its real estate footprint to improve its operating efficiency metrics.
That said, the company’s bricks and mortar retail business could see a significant rebound if and when vaccines are circulated to the vast majority of the population. The company’s service and its brand provides an intrinsic value to this company that supports its current valuation.
There’s value here for those bullish on the long-term recovery. That said, this is a company I think belongs on investors’ watch lists right now rather than their portfolios, as there remains a significant amount of uncertainty on the near-term horizon.
Invest wisely, my friends.
