Can Nordstrom Keep Rising to New All-Time Highs?

Tomorrow, Nordstrom (NYSE: JWN  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk reaction to news that turns out to be exactly the wrong move.

Nordstrom did a great job in the aftermath of the financial crisis of restoring its full profitability and keeping its loyal customer base. As a result, the stock has recovered to new all-time record highs, but what's next for the retailer? Let's take an early look at what's been happening with Nordstrom over the past quarter and what we're likely to see in its quarterly report.

Stats on Nordstrom

 

 

Analyst EPS Estimate

$0.76

Change From Year-Ago EPS

8.6%

Revenue Estimate

$2.80 billion

Change From Year-Ago Revenue

6.7%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Can Nordstrom keep on climbing this quarter?
In recent months, analysts have reduced their views on Nordstrom's earnings, cutting a nickel per share from their estimates for the just-finished quarter and more than three times that much from their full-year fiscal 2014 consensus. Yet that hasn't held the stock back, as it has risen more than 10% since early February.

Nordstrom has a reputation for trying out new things rather than following the herd. In an environment in which many luxury brands are pushing into China and other international markets, Nordstrom's focus remains on building out the company's existing presence by attracting more customers in its current markets through expanded channels. With a $240 million digital strategy that includes online and mobile sales as well as new physical locations, Nordstrom is leaving no stone unturned in its efforts to be available to shoppers.

Moreover, Nordstrom has sought to make itself attractive to younger clientele through its bringing U.K. retailer TopShop into some of its stores and plans to expand that relationship this year. Nordstrom is also aiming to make its Nordstrom Rack discount business a bigger part of its overall sales, as the stores leverage the Nordstrom name while capitalizing on the same trends that Ross Stores and TJX have used to entice shoppers with quality merchandise at discounted prices.

One place where Nordstrom has been an innovative trendsetter is in social media. The company boasts 4 million followers on Pinterest, with several different boards for different aspects of Nordstrom's business as well as links to push shoppers directly to the Nordstrom website to make purchases.

In addition, Nordstrom recently partnered with online marketplace Etsy to allow Nordstrom to get wholesale access to Etsy products, allowing the retailer to make exclusive offerings to its shoppers to differentiate Nordstrom from its competitors. By doing so, Nordstrom prevents Amazon.com from poaching its customers with better prices, and it will also give the company an answer to moves from other big-box retailers to bring in exclusive fashion offerings.

In Nordstrom's quarterly report, watch for the retailer to discuss more of its plans for future expansion. With so many directions to go in, Nordstrom has plenty of opportunities to find further growth well into the future.

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