Please ensure Javascript is enabled for purposes of website accessibility

Why Nordstrom Stock Fell on Tuesday

By John Rosevear – May 12, 2020 at 4:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Restarting retail won't be a smooth process.

What happened

Shares of upscale department-store operator Nordstrom (JWN 1.89%) closed lower on Tuesday, likely on a growing consensus that the reopening of the U.S. economy will be a gradual, up-and-down process.

Nordstrom's shares ended the session at $16.16, down 5.6% from Monday's closing price.

So what

Nordstrom last updated investors on May 6, when it said that it will permanently close 16 of its full-price department stores amid a larger restructuring plan that aims to save about $150 million per year. 

"We've been investing in our digital and physical capabilities to keep pace with rapidly changing customer expectations," CEO Erik Nordstrom said. "The impact of COVID-19 is only accelerating the importance of these capabilities in serving customers." 

The entrance to Nordstrom's store on West 57th Street in New York.

Image source: Nordstrom.

Nordstrom said that while its physical stores have been closed, it has used its stores' inventories to fulfill online sales. More than half of orders placed via its flagship full-price nordstrom.com storefront are being fulfilled from closed stores, while about a quarter of orders via its off-price online storefronts are being fulfilled from shuttered Nordstrom Rack stores.

Nordstrom plans to reopen its stores in phases over the next couple of months, as local regulations and conditions allow. It said that it will postpone its annual anniversary sale event from July to August, when it expects all of its full-price stores to be open. 

Now what

Consumer-discretionary investors won't have to wait long for an update on Nordstrom's store-reopening plan. The company is expected to report its fiscal first-quarter earnings on May 21.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool recommends Nordstrom. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nordstrom, Inc. Stock Quote
Nordstrom, Inc.
JWN
$18.07 (1.89%) $0.34

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.