Another retailer struggles with consumer spending

Nordstrom shares are down 3% as forward guidance worries investors.

By Motley Fool Aug 16, 2013 2:44PM
Nordstrom (JWN) reported earnings Friday morning, and investors are punishing the stock now. Nordstrom's second quarter saw a lower-than-expected increase in revenue -- analysts were looking for a 6.8% increase, but the department store operator only delivered 4.4%.

Shares have fallen about 3% today as investors react to the report. While revenue disappointed some, guidance was of greater concern: The company lowered both its full-year sales and its profit forecasts. Other retailers have reported similar trends this earnings season, suggesting consumer spending has slowed. CFO Michael Koppel said, "We are in a business that tends to travel in cycles."
Paul Bradbury, OJO Images, Getty ImagesMotley Fool analyst Charly Travers is surprised to see Nordstrom suffering alongside low-end retailers like Macy's and Kohl's, but thinks the stock remains a solid bet. Investors are only paying 15 times earnings for a company with great management, so this dip is likely to be temporary -- and might just be a good buying opportunity.

The Motley Fool's 12 top stocks for 2013 are now available! So if you're tired of picking stocks out of a hat and hoping that one skyrockets, check out Stocks 2013: The Investor's Guide to the Year Ahead. It's The Motley Fool's current top report, and includes Chief Investment Officer Andy Cross's top stock for 2013! This under-the-radar company is the secret winner in the war for the last precious drops of oil on the planet. Find out what it is and how you can take advantage of this unseen company's huge profits in this special, free report, just click here now. 

MSN Money on Twitter and Facebook

Like us on Facebook: MSN Money and Top Stocks

Follow us on Twitter: @msn_money and @topstocksmsn

Aug 16, 2013 4:11PM
The American consumer has lost the monopoly game. Only things we can afford are gas and toilet paper. Geez, never would have seen that comin.
Aug 16, 2013 4:23PM

"Other retailers have reported similar trends this earnings season, suggesting consumer spending has slowed."


How much do they get paid to state the obvious?

Aug 16, 2013 4:27PM
Of course you have a WEAKENING ECONOMY. When you  increase prices on Commodities, people will only spend on necessities.
Factor in their everyday needs and there is not very much left for the simple pleasures in life.
Aug 16, 2013 5:44PM
So the top is cutting back also, surprise! surprise !
Aug 16, 2013 5:32PM
Wall Street and the markets are just stupid when it comes to American business.  Any growth is a positive, not guessing games about what we think should be a decent return on sales. What a bunch of BULL! I think Wall Street should grow 200 points next session, and if not I believe a 2000 point sell off is in order. Bulls--t!
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

120 rated 1
268 rated 2
439 rated 3
709 rated 4
641 rated 5
609 rated 6
640 rated 7
516 rated 8
272 rated 9
152 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.