Nordstrom Drops Most Since May After JPMorgan Cuts RatingBy and
Management sees no ‘silver bullets,’ analyst says in note
Macy’s and other department store chains also decline
Nordstrom Inc. fell the most in seven months after JPMorgan Chase & Co. downgraded the shares, saying the upscale retailer’s management sees no “silver bullets” to revive stagnant sales.
Analyst Matthew Boss cut his recommendation to the equivalent of sell from neutral and trimmed his 12-month target share price to $48 from $55. He cited higher costs to drive customer traffic and a shift from brick-and-mortar stores to e-commerce that has “yet to find an equilibrium.”
Nordstrom is looking to boost sales by setting itself apart from other department stores and reaching more customers outside the mall. This week, the company said it’s testing an e-gifting option for last-minute shoppers on its website. Nordstrom owns the flash-sale site HauteLook and in 2014 it bought styling service Trunk Club. While e-commerce accounts for more than 20 percent of Nordstrom’s sales, investments into online capabilities have caused expenses to outpace sales, Chief Financial Officer Mike Koppel said on an earnings call earlier this year.
“Management sees no silver bullets in the barrel” as it looks to 2017, JPMorgan’s Boss said Friday in a note to clients.
Nordstrom slid as much as 9.2 percent to $50.20 in New York trading, in the biggest intraday drop since May 13. The stock had climbed 11 percent this year through Thursday. Other department-store chains also tumbled on Friday. Macy’s Inc., J.C. Penney Co. and Kohl’s Corp. all dropped at least 6 percent.
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