Shares of Nordstrom, Inc. JWN have surged 77.2% in the past year, outperforming the Zacks Retail - Apparel and Shoes industry’s 23.2% growth, the broader Retail-Wholesale sector’s 37.9% increase and S&P 500 index’s 38.7% growth. JWN is strictly focused on driving Nordstrom banner growth, optimizing operations and building momentum at Rack. Digital efforts are also underway.

Let’s delve deeper.

Analyzing JWN’s Core Strengths

Nordstrom has been expanding its Rack banner by increasing the brand penetration. It looks to strengthen Rack’s productivity throughout its network, reduce transportation costs and delivery times and enhance services via faster delivery. The company continues to focus on introducing more premium brands at Rack, better assortment and increased brand awareness. The Rack banner's digital channel is a differentiator to the off-price retail.

JWN has been making efforts to change the storage and access of data. This transformational change looks to improve data access and analysis capabilities, hence enhancing the ability to leverage generative AI solutions and services at a higher pace. In the most recent quarter, digital momentum continued with sales growth of 6% year over year. Growth at nordstrom.com was backed by an increase in the assortment across a balance of price points, improvements in search and discovery and high in-stock rates of its fastest-turning items.

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The company has also been making notable efforts to drive efficiency and enrich the customer experience. It is redefining its flagship brand to give it a trendy look, offering a style-driven and top-quality assortment. Increased focus on distribution capabilities and improved connectivity of physical and digital inventory are other tailwinds. 

Nordstrom is focused on its long-term strategy, which builds on its market strategy to capitalize on its digital-first platform to better serve customers, gain market share and deliver profitable growth. It concentrates on winning in the most important markets, expanding the reach of Nordstrom Rack and enhancing its digital velocity. JWN’s closer-to-you strategy, which aims to link stores and services to expedite deliveries, expand online offerings and add cheaper merchandise at its Rack off-price stores, bodes well. Such catalysts aim at generating $2 billion in revenues in the long term.

JWN Stock’s Valuation

Nordstrom stock is trading at an attractive valuation relative to the industry. Going by the price/earnings ratio, JWN stock is currently trading at 11.96 on a forward 12-month basis, lower than 16.09 of the industry.

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Nordstrom Well Poised for Success

Nordstrom’s robust strategies, including sturdy momentum at its Rack banner and digital endeavors, position it well for success. Its long-term growth strategies coupled with the stock’s attractive valuation further demonstrate strength. The company currently carries a Zacks Rank #2 (Buy).

Other Key Picks

We have highlighted three other top-ranked stocks, namely Boot Barn BOOT, Abercombie ANF and Deckers DECK. 

Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has a trailing four-quarter earnings surprise of 6.8%, on average. 

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales indicates growth of 13.9% from the year-ago figure.

Abercrombie, a leading casual apparel retailer, currently carries a Zacks Rank of 2. ANF delivered an earnings surprise of 16.8% in the last reported quarter. 

The consensus estimate for Abercrombie’s current financial-year sales indicates growth of 13% from the year-ago figure. 

Deckers, a footwear and accessories dealer, currently carries a Zacks Rank of 2. DECK delivered an earnings surprise of 41.1% in the trailing four quarters.

The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 13.7% from the year-ago figure.

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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

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Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report

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