Nordstrom Inc. is looking at its long game.
The retailer, which will update investors on its strategy in a meeting today, gave a quick preview to the market, keeping projections for this year steady while indicating continued growth in the years ahead.
At least some shareholders were hoping for a little something more and the company’s stock slipped 3.6 percent to $51.54 in in early trading Tuesday.
The retailer plans to set itself apart in the market by using its local market strategy to connect its bricks and clicks.
“This positions Nordstrom to further engage and serve customers with the right product, in the right place and at the right time,” the company said.
Nordstrom is in the process of integrating its various lines of business in its largest market, Los Angeles, which is getting more inventory-free Local stores and also has a critical mass of full-line doors and Rack outlets.
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The company senses a turning point and looks to build shareholder value by “improving profitability and returns as Nordstrom expects to reach a pivotal year in achieving long-term profitable growth. Management will discuss plans to further scale and leverage its generational investments in new markets and digital capabilities. These drivers are expected to contribute to improving operating margins and adjusted return on invested capital.”
Nordstrom is also looking at “disciplined capital allocation” with more cash flowing through the business as “generational investments mature.”
This year, the firm continues to expect comparable sales to grow 0.5 percent to 1.5 percent. Total sales are projected to grow in the range of 0.7 percent to 2 percent this year, to $15.2 billion to $15.4 billion.
But momentum is seen picking up from there.
For the stretch between 2017 and 2020, Nordstrom is looking for net sales to grow 3 percent to 4 percent on an average annualized rate, outpacing market growth of about 1 percent.
Earnings before interest and taxes are projected to grow at 5 percent to 6 percent for the 2017 to 2020 period.
And adjusted return on invested capital is expected to increase from 9.7 percent last year to a percentage in the midteens over the next five years.