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Which Top 5 Luxury Retail Stocks Have the Strongest Earnings Trends?

February 24, 2013

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Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how the top five luxury retail stocks rank via earnings trends:

Nordstrom Inc. (NYSE:JWN): Current Price $53.99

Fiscal Year	2009	2010	2011	2012	2013
Revenue ($) in millions	8,573	8,627	9,700	10,880	12,150
Diluted EPS ($)	1.83	2.01	2.75	3.14	3.56

We are impressed with the solid growth at this lux retailer. The topline has grown over 41% after 2009, while EPS has almost doubled…

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter	Jan. 31, 2012	Apr. 30, 2012	Jul. 31, 2012	Oct. 31, 2012	Jan. 31, 2013
Revenue ($) in millions	3,266	2,629	3,009	2,808	3,702
Diluted EPS ($)	1.10	0.70	0.75	0.71	1.40

Nordstrom certainly had a stellar quarter in January 2013: revenue grew 32% compared to the previous quarter while EPS doubled. Certainly a candidate to watch in this analysis…

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