Yet Another Retailer Struggles With Consumer Spending

Nordstrom  (NYSE: JWN  )  reported earnings this morning, and investors are punishing the stock now. Nordstrom's second quarter saw a lower-than-expected increase in revenue -- analysts were looking for a 6.8% bump, but the department store operator only delivered 4.4%.

Shares have fallen about 3% today as investors react to the report. While revenue disappointed some, guidance was of greater concern: The company lowered both its full-year sales and its profit forecasts. Other retailers have reported similar trends this earnings season, suggesting consumer spending has slowed. CFO Michael Koppel said, "We are in a business that tends to travel in cycles."

Motley Fool analyst Charly Travers is surprised to see Nordstrom suffering alongside lower-end retailers like Macy's and Kohl's, but thinks the stock remains a solid bet. Investors are only paying 15 times earnings for a company with great management, so this dip is likely to be temporary -- and might just be a good buying opportunity.

Not keen on Nordstrom? The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

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9/26/2016 4:02 PM
JWN $51.50 Down -0.07 -0.14%
Nordstrom CAPS Rating: ****