Why Nordstrom Stock Lost 24% in May

MarketsMotley Fool

What happened

Last month was a tough one for Nordstrom (NYSE: JWN) shareholders, as their stock shed 24% in May compared to a 7% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.

Continue Reading Below

The slump added to a wider drawdown in the retailer's stock, with shares now near 10-year lows.

So what

Investors pummeled shares late in the month after the company revealed surprisingly weak fiscal first-quarter results. Revenue fell 4% during the period, with declines occurring in both its full-price and off-price segments and across its physical and e-commerce sales channels.

Now what

Executives expressed confidence that they could recover from the slump. "This is well within our control to turn around," copresident Erik Nordstrom said in a press release. Yet investors chose to focus more on the retailer's updated outlook, which implies continued struggles ahead. Specifically, Nordstrom now sees weaker results in both the top and bottom lines in 2019, with adjusted earnings and adjusted profitability forecasts each taking a big step lower. The pessimism around the stock has made it cheaper than inventors have seen in years. However, that low valuation seems justified given that market share and profit trends are far from stable today.

10 stocks we like better than NordstromWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Nordstrom wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Nordstrom. The Motley Fool has a disclosure policy.