NORDSTROM INC. $69 - New York symbol JWN

NORDSTROM INC. $69 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 192.6 million; Market cap: $13.3 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.9%; TSINetwork Rating: Average; www.nordstrom.com) mainly sells upscale clothing, accessories and footwear. The company owns and operates 276 stores in 36 states. In September 2014, it opened its first Canadian location, in Calgary.

Nordstrom recently paid $350 million in stock for Trunk Club, which sells men’s clothing over the Internet. Trunk Club sends its members a selection of clothes based on their sizes and preferences. Members keep only the items they want and ship the rest back.

The company will operate Trunk Club as a separate business. However, this firm’s expertise should help Nordstrom improve its existing online operations.

Meanwhile, Nordstrom’s sales rose 6.1% in its 2015 second quarter, which ended August 2, 2014, to $3.4 billion from $3.2 billion a year earlier.

That’s mainly because the company continues to open new outlets. Same-store sales at its full-line stores fell 1.2%. However, online sales jumped 22.0%, thanks to an expanded selection of merchandise.

Earnings fell 0.5%, to $183 million from $184 million. But due to fewer shares outstanding, per-share earnings rose 2.2%, to $0.95 from $0.93.

The additional shares Nordstrom issued to pay for Trunk Club, as well as that company’s losses, will cut Nordstrom’s projected fiscal 2015 earnings by about 4%, to $3.55 a share. The stock trades at 19.4 times that estimate, which is still reasonable in light of Nordstrom’s strong brand and international expansion opportunities. It also plans to buy back $1.3 billion of its shares by 2016. The $1.32 dividend yields 1.9%.

Nordstrom is a buy.

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