Nordstrom stock opened 30% up on Friday: explained here
Nordstrom Inc (NYSE: JWN) opened 30% up this morning following reports that Ryan Cohen has built a sizable stake in the luxury department store chain.
What is he going to push for at Nordstrom?
Reportedly, the activist investor wants to shake up the board and push for cost cuts in a bid to improve the stock performance. In particular, the Wall Street Journal said, he’ll try and replace Mark Tritton – the former chief executive of Bed Bath & Beyond.
It may be difficult for Cohen to push for changes at Nordstrom considering the family members own about 30% of it. But the retailer says it’s open to hearing him out.
While Mr Cohen hasn’t sought any discussions in several years, we’re open to hearing his views, as we do with all Nordstrom shareholders. We’ll continue to take actions we believe are in best interests of the company and our shareholders.
For the year, Nordstrom stock is now up more than 60%.
BMO Capital’s Siegel reacts on the news
Last month, Nordstrom reported a 3.5% year-on-year decline in its holiday sales and trimmed its outlook for the full year.
Blaming excessive markdowns, it said per-share earnings are now expected to be capped at $1.70 versus $2.30 to $2.60 it had guided for earlier. Sharing his take on what to expect from Cohen, BMO Capital Markets’ Simeon Siegel wrote:
Could Cohen be viewing the Rack business as underperforming while connected to the full-price chain? Sure, seems like a reasonable hypothesis. Or could he be looking for an entire sale? We suppose.
Those interested in buying Nordstrom stock after today’s development should also know that Wall Street currently rates it at “hold”.
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