Nordstrom Financial Analysis

Topics: Nordstrom, Stock, Balance sheet Pages: 16 (5459 words) Published: November 15, 2011
Executive Summary
This report examines the value of Nordstrom Inc. stock and offers existing shareholders and prospective shareholders an insight into the value of the company. The purpose of this report is to provide potential shareholders with information as to why they should buy into the company and existing shareholders with information as to why they should hold their stock.

Since Nordstrom opened, the company has achieved critical acclaim for outstanding customer service and inventory selection. Sales have always been on the rise with the exception of a slight dip after the economic recession, but were quickly regained with the expansion of Nordstrom Rack stores. To exemplify this, the company report is divided into four sections that have 3 corresponding sub-points: •Company Background & Current Stage in Growth Lifecycle

Detailed Financial Information-Microeconomics
oFinancial Reporting and Analysis
oInvestment & Stock Analysis/Options
oProfitability and Value to Investors
Industry, Landscape, Trends & Competitors-Macroeconomics oSustainability
oCompetitive Advantage
oPosition in Market
Recent Developments, Analyst Opinions and Wall Street Consensus oManagement Interviews
oNordstrom Rack
oStore Walk Through
Based off of information gathered from these sections it is recommended that current shareholders hold, while potential shareholders buy. Introduction
In the year of 1928 Nordstrom emerged onto the retail scene and soon after became one of the premier department stores within the country. This was achieved by the owner’s quest to provide exceptional customer service not available at other stores, provide a wide range of modern inventory and promote expansion within the company. Nordstrom is a publicly traded company whose stock has been on the rise for a quite some time. With one minor period of decrease during the economic crisis, Nordstrom has been able to bounce back full force. After analyzing developments in the company background, microeconomics, macroeconomics, and recent developments of Nordstrom’s, it is in potential stockholders best interest to buy into the company while those already invested should hold.

Company Background & Current Stage in Growth Lifecycle

Nordstrom, a store almost everyone knows, comes from a humble beginning. John Nordstrom was born in Alvik Neder Lulea, Sweden in 1871. He came to America at the age of 16 with only five dollars in his pocket and was unable to speak any English. He found odd jobs that took him from New York to Wisconsin, to the redwoods of California, and eventually to Washington. John Nordstrom, with Carl Wallin, a friend of his, opened their first shoe store in 1901. The store was located in Seattle, which marked the start of their venture into the retail industry. Since the beginning the company was founded on the belief that exceptional customer service was the key to driving their business. Off of this belief the store built a strong customer base, and opened their second store in 1923. John Nordstrom sold his shares to his sons and retired in 1928. Come 1930, his sons, who became the sole owners after acquiring shares from partner Carl Wallin, renamed the store to Nordstrom’s. By implementing outstanding customer service policies and gaining a strong customer base since Nordstrom has always shown an opportunity for growth and expansion leading their market shares to become increasingly valuable.

With the success of the company Nordstrom had ample opportunities for expansion in the industry in which they capitalized on. During The Great Depression of the 1930’s the two stores made $250,000 in sales and then expanded into Washington and surrounding states. Nordstrom had eight shoe stores in Washington and Oregon, and 13 leased shoe departments in Washington, Oregon and California. “The company’s flagship store, in downtown Seattle, was the largest shoe...
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