Amazon-Proof Retail Stock: Nordstrom
This traditional department store is spending big money to stand up to the world's largest online retailer.


Amazon.com (symbol AMZN) is projected to account for one-half of all internet-based U.S. retail sales by 2021, according to brokerage firm Needham & Co., up from about one-third of sales in 2016. The threat to competitors in the retail space has become so dire that a "Death by Amazon” index that tracks the stock prices of 54 retailers sits near a four-year low, according to research firm Bespoke Investment Group, which compiles the index.
With mall traffic declining as people spend more time and money online, Nordstrom (JWN) would seem like a risky bet. And indeed, Nordstrom has suffered a sharp slowdown in sales and profit growth. But of all the stocks in the Death by Amazon index, Nordstrom looks like the “best situated to succeed,” says Bespoke, the index creator.
Despite the threat posed by online competition, Nordstrom’s customer base appears to be sticking with the department store. The company serves a more affluent, “fashion focused” client than most department stores, says Bespoke, making it less likely that Nordstrom shoppers will buy clothing on Amazon. Nordstrom also sells a high percentage of exclusive and private-label goods that aren’t available elsewhere.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Nordstrom’s attempts to attract more budget-conscious shoppers seem to be working, too. The firm is expanding into the off-price market with Nordstrom Rack, which is bringing in new customers and now accounts for about 30% of total sales. Nordstrom is also blending online shopping and in-store experiences. Customers can reserve apparel online to try on in stores, and arrange for curbside pickup of items purchased online.
Granted, Nordstrom is spending heavily to thwart online competition — a cash burn that is taking a toll on the bottom line. Analysts expect Nordstrom’s profits to fall by 7.7% in the 12-month period that ends in January 2018. But sales should inch up by 3.0% over fiscal 2017, and profit growth should resume in 2018, according to Wall Street analysts’ forecasts.
Nordstrom’s stock, meanwhile, has been in a downward spiral for two years. The shares still look pricier than those of more troubled department stores. But that isn’t saying much. Nordstrom’s price-to-sales ratio is just 0.6, a bargain compared with the 3.1 price-sales average for Standard & Poor’s 500-stock index. Investors can scoop up a dividend yield of 3.1% while betting on a turnaround in the firm’s fortunes.
Nordstrom by the Numbers
- Share price: $47.15
- Market value: $7.9 billion
- Price-earnings ratio: 16
- Estimated 12-month profit growth: -7.7%
- Dividend yield: 3.1%
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
Are Tariffs and the ‘Pumpkin Spice Tax’ Coming for Your Fall Coffee Budget?
Food Taxes Inflation pressures, tariffs, and talk of the so-called 'pumpkin spice tax' have some wondering about rising coffee prices.
-
Can President Trump Fire Fed Governor Lisa Cook?
Markets hate uncertainty, especially when it comes to monetary policy and interest rates, and questions about the Fed are compounding.
-
Stocks Struggle to Start Nvidia Week: Stock Market Today
Another important week for the stock market starts on a risk-off note.
-
Dow Rips 846 Points to New All-Time High: Stock Market Today
Fed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
-
Tech Sells Off While Trump Stirs the Fed: Stock Market Today
We've reached another important part of earnings season, though markets remain captivated by the president, the Fed, and interest rate policy.
-
Dow Retreats From a Record High: Stock Market Today
Quietly rising since April, Home Depot stock was conspicuously constructive Tuesday as high-profile tech names dragged equity indexes down.
-
What Tariffs Mean for Your Sector Exposure
New, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market Today
The last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.
-
Stocks Can't Hold Meta, Microsoft Gains: Stock Market Today
The main indexes all opened higher Thursday on impressive Big Tech earnings, but momentum faded into the close.
-
Stocks Are Up and Down on Fed Day: Stock Market Today
In another sign of changing times, JPMorgan has partnered with Coinbase to enable cryptocurrency purchases with credit cards.