{"id":30948,"date":"2012-07-18T20:35:33","date_gmt":"2012-07-19T00:35:33","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/07\/wealth-gap-investing-nordstrom-nyse-jwn-staying-strong\/"},"modified":"2012-07-18T20:35:33","modified_gmt":"2012-07-19T00:35:33","slug":"wealth-gap-investing-nordstrom-nyse-jwn-staying-strong","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/07\/18\/wealth-gap-investing-nordstrom-nyse-jwn-staying-strong\/","title":{"rendered":"Wealth Gap Investing: Nordstrom (NYSE: JWN) Staying Strong"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

\"Nordstrom<\/p>\n

Considering that Nordstrom (NYSE: JWN) executives are already plotting their moves well into 2018, they seem confident that their popularity isn\u2019t going anywhere.<\/p>\n<\/div>\n

Most Americans believe that retailers are struggling right now. And they have good reason to think that way, with all the dismal jobs report numbers in the news.<\/p>\n

Everyone knows that Americans without jobs means Americans without cash to burn on all of those little and not so little extras in life.<\/p>\n

For many, it\u2019s difficult to justify an additional bottle of soda, that bag of Oreos or a set of sirloin steaks at the grocery store without some additional cash readily available. It\u2019s tough to throw maturity to the wind and buy a $59.99 blouse, another completely unnecessary power tool, or new kitchen cabinets when it\u2019s a fiscal headache just balancing each month\u2019s bills.<\/p>\n

So it\u2019s completely understandable if average investors feel uncomfortable putting their money into the retail sector.<\/p>\n

But one company is showing that wealthier Americans, at least, are still shopping luxuriously <\/strong>\u2013 Nordstrom Inc.<\/strong> (NYSE: JWN).<\/p>\n

And it\u2019s the latest example of how investors are being rewarded for sticking to the furthest ends of the luxury-discount spectrum. (For more about \u201cClass Warfare<\/a>\u201d investing, check out Carl Delfeld\u2019s article from last October.)<\/p>\n

Keep in mind that nationwide discount chains like Dollar Tree<\/strong> (Nasdaq: DLTR) and Dollar General Corporation<\/strong> (NYSE: DG) are also doing very well. Both are showing rapid growth, rising stock and continuing profits \u2013 for the precise reason that economic issues are still weighing heavily on the lower classes.<\/p>\n

But that\u2019s no reason to avoid retailers that cater to the cr\u00e8me de la cr\u00e8me among us. As Nordstrom shows, vanity pays\u2026 quite nicely, in fact.<\/p>\n

Don\u2019t Discount This High-End Retailer<\/strong><\/h2>\n

A plain and simple pair of beige, low-heeled, women\u2019s Jimmy Choo shoes for $525.00.<\/p>\n

A single pair of men\u2019s Todd Snyder wool trousers for $385.00.<\/p>\n

La Mer moisturizing cream for $265.00 a bottle.<\/p>\n

Ray-Ban sunglasses for $210.00.<\/p>\n

It\u2019d be the easiest thing in the world to look at Nordstrom as one of the worst possible places to park money in during tough economic times. Yet somehow and someway, the high-end, nationwide chain is one of America\u2019s fastest-growing retailers right now.<\/p>\n

Its spread of holdings includes Nordstrom department stores, off-price Nordstrom Rack retailers, both Jeffrey and treasure&bond boutiques, and Last Chance clearance stores, along with the shopping it offers online, of course. And apparently, the larger company knows how to manage those properties, because it keeps consumers clamoring for more\u2026<\/p>\n

In 2008, Nordstrom Inc. added 10 stores, and in 2009, it completed another nine. For 2010, it pulled off a whopping 12 new fully functional locations and by the end of last year, it beat that already impressive number to add 14 stores, for a total of 225 across the country.<\/p>\n

And the vast majority of them make a great deal of money, giving the larger business an enviable bottom line\u2026<\/p>\n

Vanity is Paying a 2% Dividend\u2026<\/strong><\/h2>\n

Looking back over Nordstrom\u2019s last few fiscal years, it quickly becomes apparent that the company is doing just fine despite the reoccurring waves of negativity washing over so many other retailers every few months.<\/p>\n

In 2009, Nordstrom made a gross profit of $3.2 billion and operating income of $834 million. It raised both the following years to $3.8 billion and $1.1 billion, respectively. And for its fiscal year ending on January 27, 2012, the company proved its worth yet again with a profit of over $4.2 billion and operating income of $1.2 million.<\/p>\n

For its first quarter this year, analysts predicted earnings of $0.75 a share. And while Nordstrom fell five cents below that, net earnings still rose 2.9% compared to the same time the previous year.<\/p>\n

In other words, it\u2019s still growing.<\/p>\n

For that matter, it continued growing even in June, a month that had most other American retailers \u2013 including rival Macy\u2019s<\/strong> (NYSE: M) \u2013 discounted and disheartened. Not Nordstrom though: Its same store sales grew 8.1% over the previous five-week period.<\/p>\n

The company\u2019s stock reflects those positive results. Since its low in 2008, it seems set on hitting a new record, climbing ever so steadily towards the $45 mark it originally breached early in 2007. It also pays a 2.1% dividend and looks to have plenty of room to increase that number with a 30% payout ratio.<\/p>\n

A look at its price progression over the last two or five years shows a company that can take the hits and rise right back above them before long.<\/p>\n

Considering that Nordstrom executives are already plotting their moves well into 2018 \u2013 particularly with a much-awaited grand opening in New York City \u2013 they seem confident that their popularity isn\u2019t going anywhere. And neither are their profits.<\/p>\n

Good Investing,<\/p>\n

Jeannette Di Louie<\/p>\n

\n<\/a> <\/a> <\/a> <\/a> <\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U Considering that Nordstrom (NYSE: JWN) executives are already plotting their moves well into 2018, they seem confident that their popularity isn\u2019t going anywhere. Most Americans believe that retailers are struggling right now. And they have good reason to think that way, with all the dismal jobs report numbers in the news. … <\/p>\n

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