Nordstrom Earnings Disappoint: Has Luxury Lost its Luster? | Investor Beat - 8/16/13

TL;DR

Housing starts are up, but retail is struggling; opportunities exist in beaten-down stocks.

Transcript

we've got good news in housing and more bad news in retail investor beat starts now thanks for watching I'm Alison Southwick the good news is housing starts are up a solid 5.9% while the market is ending the week with a whimper joining me now in the studio are Ron gross and Charlie Travers gentlemen our top story Nordstrom is down after reporting q... Read More

Key Insights

• 😀 Nordstrom faces challenges in same-store sales and profitability, impacting its stock value.
• 👪 Home builders and retailers are navigating varying degrees of success in the current market climate.
• ❓ Opportunities exist for investors in well-managed companies like Nordstrom and Kohl's.
• 😥 Applied Materials shows promise for future growth despite disappointing quarterly numbers.
• ❓ Retailer Joseph A Bank is struggling with promotional activities, impacting sales figures.
• 🤨 Pandora faces competition from Apple and Spotify, raising questions about its profitability.

Questions & Answers

Q: Why is Nordstrom experiencing a decline in sales despite targeting a high-end market?

Despite catering to luxury customers, Nordstrom saw a decline in same-store sales and profitability, impacting its stock value due to weakened guidance for the year.

Q: Are there investment opportunities during the current market downturn?

Well-managed companies like Nordstrom and Kohl's present potential investment opportunities, as they tend to raise dividends and prioritize shareholder returns even in challenging times.

Q: How are home builders and retailers faring in the current market climate?

While home builders are experiencing positive growth, retailers like Nordstrom and other giants in the industry are facing challenges in sales and profitability.

Q: What are the future prospects for companies like Applied Materials despite weak quarterly numbers?

Applied Materials has a positive outlook for next year due to its involvement in providing equipment for semiconductor chips and displays, driving optimism despite weak current sales.

Summary & Key Takeaways

• Housing starts are up by 5.9%, but retail giants like Nordstrom, Walmart, Macy's, and Kohl's are reporting lower-than-expected numbers.

• Nordstrom, known for catering to a higher-end clientele, saw a decrease in same-store sales and profitability, leading to a drop in stock value.

• There are investment opportunities in well-managed companies like Nordstrom and Kohl's, with potential for positive returns despite the current market challenges.