What Happened: Shares of luxury department store chain Nordstrom (NYSE:JWN) jumped 13.7% in the morning session after Reuters reported the company's founding family is seeking to take the business private. The report added that Nordstrom is in talks with Morgan Stanley and Centerview Partners as it weighs the interest of other potential private equity firms for a deal. According to sources, there is no certainty an agreement will be reached.
Is now the time to buy Nordstrom? Find out by reading the original article on StockStory.
What is the market telling us: Nordstrom's shares are very volatile and over the last year have had 20 moves greater than 5%. But moves this big are very rare even for Nordstrom and that is indicating to us that this news had a significant impact on the market's perception of the business.
The previous big move we wrote about was 13 days ago, when the stock dropped 14.8% on the news that the company reported fourth-quarter results and provided a full-year earnings forecast that missed analysts' expectations. Full-year revenue guidance was also underwhelming, with sales growth expected in the range of a decline of 2% to an increase of 1%. The weak outlook is likely the culprit driving down the stock price. In addition, the topline growth was weak, with revenue up 2.3% year on year. Management noted, "We continue to see a cautious consumer that is mindful of discretionary purchases in light of inflation, higher interest rates, and the resumption of student loan payments."
On the other hand, revenue, gross margin, and adjusted EPS outperformed Wall Street's estimates during the quarter. Overall, it was a mixed but weaker quarter for the company.
Nordstrom is up 2.1% since the beginning of the year, but at $18.67 per share it is still trading 19.9% below its 52-week high of $23.30 from July 2023. Investors who bought $1,000 worth of Nordstrom's shares 5 years ago would now be looking at an investment worth $419.21.