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Nordstrom Inc. (JWN) pulled out all the stops during the holidaysvto encourage consumers to shop in its stores. Unfortunately, its December sales still declined 8% year-over-year, and management announced that it was going to miss its fourth quarter EPS guidance of $0.35-$0.45.
While 2008 was difficult environment for Nordstrom, we think that 2009 will be even worse for the retailer. We are reducing our 2009 EPS estimate from $1.66 to $1.00. This reduction reflects our view that sales will decline 6.5% and its gross margin will contract 250 basis points.
As a result, we are downgrading JWN shares from Hold to Sell and lowering our target price from $13 to $10.
Read the full analyst report on JWN
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