It's been a rough couple of days for high-end retailer Nordstrom (NYSE:JWN).

On Monday, it missed fourth-quarter earnings, and then it took another hit in yesterday's market meltdown. But the shares have recovered a bit so far today and could be poised for further gains.

Fourth-quarter results were actually quite impressive, as total sales grew 15% and diluted earnings improved 29%. But analysts were looking for another penny in earnings and sent the stock down. Full-year results were solid too; sales for the year advanced almost 11%, and earnings grew 29%.

Nordstrom has been finding the right merchandise mix to bring customers into its stores, and its upscale image sets it apart from other department-store retailers such as J.C. Penney (NYSE:JCP), Kohl's (NYSE:KSS), and Federated's (NYSE:FD) Macy's chain. The company also prides itself on pampering clients with trendy cafes and hands-on customer service. In other words, it's found a way to move the focus off price, an area dominated by low-cost Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), known for hawking affordable luxury in a big-box format.

But Nordstrom operates in the upper echelon of retailing, associated more with privately held Neiman Marcus and Federated's Bloomingdales. And with only 155 stores, of which 98 are "full-line" Nordstrom stores and 50 Nordstrom Rack outlet stores, the company has plenty of real estate yet to expand into and try on for size.

The stock has taken a breather but still isn't overly cheap, trading at about 19 times projected earnings for the coming year. However, Nordstrom's cash flow generation is strong, its growth prospects are bright, and it has found a way to differentiate itself in the crowded department store realm of retailing. There will undoubtedly be fashion hits and misses down the road, but the long-term picture is attractive for Nordstrom.

For related Foolishness:

Wal-Mart is an Inside Value pick.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.