Aug 17 (Reuters) - Nordstrom Inc's shares surged over 9 percent on Friday, a day after its quarterly same-store sales numbers trounced Wall Street estimates, leaving analysts impressed with the upscale retailer's online channels and its clear inventories.
The company's shares, trading at $57.20 in premarket, are set to open at a near two-year high. Its shares were the biggest percentage gainer among the New York Stock Exchange listed companies.
On Thursday, Nordstrom reported its best quarterly same-store sales growth in three years, boosted by strong online sales of 23 percent. It also raised its forecast for full year profit.
"Believe JWN has a best-in-class digital platform and is well ahead of department store peers in terms of leveraging innovative technology," Cowen & Co analyst Oliver Chen wrote in a note.
At least 6 brokerages raised their price targets on the Nordstrom stock after the company posted strong quarterly results across the board. Telsey Advisory Group's Dana Telsey was the most bullish, raising the target price on the stock by $8 to $65.
The company has been investing in top locations and expanding its discount shopping chain, Nordstrom Rack to woo shoppers back that have increasingly defected to online channels and more fast-fashion brands, which offer the trendiest styles.
Nordstrom also has a Local concept store, where shoppers have personal stylists to them help pick out clothing and accessories, dressing rooms to try them on, online ordering, and services.
"Nordstrom's initiatives are beginning to bear fruit and have positioned it as a leader in the industry," Telsey said in note titled "Nordstrom firing on all cylinders."
Analysts also cheered the company's inventory management and product assortment, which Nordstrom said was a "competitive advantage" for them.
The Seattle-based retailer's upscale products gives it an edge over online competition from players such as Amazon.com as shoppers typically steer away from making expensive buys online.
In stark contrast, J.C. Penney Co Inc said it had made fashion missteps that led to heavy discounting of its inventories, sending its shares down 27 percent on Thursday.
Cowen's Chen said that the company could report better comparable sales in the future on the strength of its digital growth and strong inventory management that is keeping their line fresh.
"The best is yet to come as the company opens its New York store, strengthens its supply chain, and continues to benefit from the shift in consumer spending online," Telsey said. (Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shailesh Kuber)