Will Nordstrom's Strategies Drive Stock Momentum in 2017?

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Nordstrom, Inc.JWN seems to be riding on a robust brand image, amendments to its operating model to generate cost savings and constant store expansion efforts. In addition, the company's long-term revenue target of $20 billion by 2020 also bodes well. Alongside, management remains keen on advancing in the technology space by boosting eCommerce and digital networks, as well as improving its supply-chain channels and marketing efforts.

We note that Nordstrom is making significant progress with respect to its customer-based strategy and also executing its strategy of enhancing market share as well as strengthening its capabilities through further investments. With regard to cost savings, the company also plans to strike a balance between its sales and expense growth.

NORDSTROM INC Price and Consensus

NORDSTROM INC Price and Consensus | NORDSTROM INC Quote

Further, this leading fashion retailer announced plans to amend its operating model in response to constant slowdown in mall traffic resulting from customers' shift to online shopping. In this regard, management plans to cut costs through a phased approach and eliminate about 300-400 jobs, which if concluded on time, will likely generate cost savings worth $60 million in fiscal 2016.

Moreover, the company primarily caters to the upscale segment, which enables it to generate high-margin revenues through its globally recognized brands. Additionally, Nordstrom offers a more inclusive selection of quality merchandise that further distinguishes it from the other mall-based department store retailers. Hence, all these efforts, along with the company's focus on its domestic and Canadian store expansion, are likely to help the company deliver sustainable growth, going ahead.

We note that this Zacks Rank #2 (Buy) stock has yielded a return of 25.4% in the past six months and outperformed the Zacks categorized Retail-Apparel/Shoe industry's gain of 4.4%. We believe these strategic endeavors along with a VGM Score of "A" and long-term earnings growth rate of 8%, position Nordstrom well for future growth.

Other Key Picks

Other favorably placed stocks in the same industry include The Children's Place, Inc. PLCE , Christopher & Banks Corporation CBK and Tilly's, Inc. TLYS , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

The Children's Place, with long-term earnings growth rate of 10.3%, gained 25.9% in the past six months.

Christopher & Banks, with long-term earnings growth rate of 15%, surged a whopping 61.4% in the past three months.

Tilly's, with long-term earnings growth rate of 13%, skyrocketed 127.8% in the past six months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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