Black Friday Stocks To Watch: Department Stores, Apparel/Footwear Retail

Page 2 of 2

Nordstrom, Inc. (NYSE:JWN)

Nordstrom, Inc. retails apparel, shoes, cosmetics and accessories. It owns and operates stores and operates through two reportable segments: Retail and Credit. Nordstrom is on our Black Friday stocks list because our Earnings leverage analysis reveals the company is a leader compared to its peers; its year-on-year change in revenues and earnings are both above the peer average. Nordstrom currently converts every 1% of change in annual revenue into 0.7% of change in annual reported earnings. The company also seems to have relatively tight control on operating costs as suggested by its relatively high pre-tax margin. Nordstrom’s gross margin of 42.2% is around average suggesting that Nordstom’s operations do not benefit from any differentiating pricing advantage. However, its pre-tax margin is more than the peer average (9.9% compared to 7.9%) suggesting better operating cost control than peers.

 

 Free snapshot reports on all 3 Black Friday stocks. Get our star ratings and scores for all fundamentals and dividend quality!

Download

Of course, department store stocks and apparel and footwear aren’t the only Black Friday stocks to consider. On average holiday sales have increased 3.3% for the last 10 years according to the National Retail Federation; this year the NRF is projecting a 3.9% increase which would bring sales to over $600 billion. Online merchants, specialty gift stores, electronics stores and shipping companies all stand to benefit. With over 700,000 seasonal employees being hired it might also help push consumer expenditure up. The only question remains whether turkey and pumpkin pie sales might notice a dip with so many employees being at work and away from their families.

Related articles from our archives:

JCPenney (JCP) Earnings: Are brand loyalty and coupons enough?, Wal-Mart (NYSE:WMT) 2013 Earnings Analysis, 2012 Earnings Analysis: Macy’s Inc. (NYSE:M) and 2012 Earnings Analysis: TJX Cos. (NYSE:TJX).

Disclaimer

Page 2 of 2