Earnings Preview for Nordstrom (JWN, M, KSS)

Nordstrom (NYSE: JWN) is expected to announce its Q1 earnings results on Thursday, May 12, after the markets close. Analysts are expecting earnings per share to reach $0.66, or an increase of 26.9% on $0.52 recorded in Q1 2010. The Street's estimate was increased by $0.02 in the last 30 days. Revenues are projected to stand at $2.22 billion, or a rise of 11.4% on Q1 2010.

Nordstrom is a fashion specialty retailer, which operates in four segments: Retail Stores, Direct, Credit and Other. As of March 19, 2010, the company operated 187 stores located in 28 states in the United States.

Looking ahead, Nordstrom is expected to post strong earnings and revenue growth throughout the year. In the upcoming quarter, analysts are expecting earnings per share to be $0.75, or an increase of 13.6% on the same quarter last year. For the whole year, Nordstrom is expected to post earnings of $3.12 per share, or 13.5% higher than a year ago. Q2 2011 revenues are projected to stand at $2.62 billion, up 8.2% from the same quarter a year ago. For the whole year, analysts expect revenues to reach $10.05 billion, or 8% higher than a year ago.

Investors will be closely monitoring the fragile U.S. recovery. Rising oil prices are not only jeopardizing the recovery in developed countries; it is also increasing costs for retailers. A combination of weak demand and rising costs will have a number of investors worried, in spite of strong April sales, which were helped by late Easter surge.

Investors will be encouraged by strong showing of Macy's (NYSE: M), which announced better than expected Q1 results earlier today. Investors will also be monitoring the performance of Kohl's (NYSE: KSS), which is due to publish its Q1 results tomorrow.

The majority of rating agencies have a Buy or Strong Buy on Nordstrom's shares. In Tuesday's trading, Nordstrom added 2.01% to its value to end the day at $48.26. In today's trading, Nordstrom added 0.21% to its value and is currently trading at $48.36.