Why Nordstrom, Inc. Shares Jumped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of fashion specialty retailer Nordstrom  (NYSE: JWN  ) popped 11% today after its quarterly results topped Wall Street expectations.

So what: Nordstrom's stock has bounced nicely in recent months on signs of improving fundamentals, and today's Q1 results -- EPS of $0.72 bested Wall Street expectations by $0.04 on a revenue increase of 6.5% -- only reinforce that positive trend. In fact, same-store sales increased 3.9% over the year-ago period, suggesting that Nordstrom's competitive position is strengthening as well.

Now what: Management reaffirmed its full-year 2014 EPS guidance of $3.75 to $3.90, bracketing the average analyst estimate of $3.86. "We continue to focus on the execution of our customer strategy with our in-store or online, full price or off-price," said CEO Blake Nordstrom. "At its core, it's about providing a superior customer experience with our investments and efforts directed toward one Nordstrom approach, that creates synergies and leverages shared assets and capabilities across all channels." Of course, when you couple Nordstrom's red-hot stock price with its still-hefty debt load and intense competitive environment, holding out for a wider margin of safety seems prudent. 

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