Saks Company Nordstrom DIRECT COMPETITOR COMPARISON Comparison Years Years HBC JWN M DDS Industry 2013 2012 2013 2012 Result Market Cap: 3.50B 13.73B 20.22B 4.52B 795.76M JWN Better Short-term Liquidity Employees: 29,000 62,500 172,500 21,600 5.00K JWN Better Current Ratio 1.14 1.13 2.20 2.33 N Qtrly Rev Growth (yoy): 0.87 0.06 0.03 - 0.07 HBC Better Quick Ratio 0.33 0.40 1.69 1.90 N Revenue (ttm): 7.02B 12.92B 28.02B 6.69B 954.90M M Better Days Receivable 0.00 0.01 69.32 71.91 S Gross Margin (ttm): N/A 0.37 0.40 0.37 0.46 M Better Days Inventory 150.77 142.42 61.59 58.83 N Oper Margins (ttm): 0.03 0.10 0.10 0.08 0.05 HBC Better Days Payables 25.41 20.88 60.16 59.55 S Net Income (ttm): 52.30M 728.00M 1.50B 316.10M - M Better EPS (ttm): 0.23 3.74 4.03 7.19 0.23 DDS Better Winner N P/E (ttm): 84.21 19.07 14.21 14.61 17.99 HBC Better PEG (5 yr expected): 1.26 1.83 0.98 0.98 1.13 JWN Better Profitabilty P/S (ttm): 0.49 1.07 0.69 0.69 0.81 JWN Better Sales Growth Years 2012-2013 1.1% 3.0% N Gross Profit % 40.6% 40.8% 38.8% 39.3% S Hudson's Bay Co (formely known as SAKs Inc)= HBC EBIT % 3.2% 3.4% 11.1% 11.5% N Nordstrom = JWN
Net Income: Cont. Operations % 2.0% 2.5% 6.1% 6.3% N Macy's = M Source: Yahoo Finance
SG&A Ratio % 29.3% 28.8% 27.7% 27.8% Similar Dillard's Inc. = DDS Winner N Industry = Apparel Stores Market N Overall Winner Nordstrom Nordstrom is better on most ratios, but Saks wins over Nordstrom with higher Gross Profit ratio, better Days Receivable and Days Payable rates. Conclusions The current ratio for both Saks and Nordstrom is > 1, which means that the current assest are are greater than the companies liabliities and function satisfactorily. However, the quick ratio is < 1 for Saks, which means the company has too much inventory; as the company sells luxury items, it is expected that they have a smaller clientele willing to shop at their stores. Nordstrom's quick ratio is > 1, which means that the company is healthy because their assets (cash/inventory/receivables/inventory) are greater and outweigh their outstanding liabilities. The days receivable has been steady for Saks and Nordstrom within a two year time frame, which indicates the company is efficient. It is odd though that the days receivable amount for Saks is zero, as a zero-day turnaround to have accounts paid is unlikely. This value may have something to do with the fact that Saks was bought out by Hudson's Bay Company, who is maintaining a good amount of financial records on behalf of the company. The amount of days the companies keep inventory on their shelves (measured in days inventory) is drastically different, with at least a three-months difference between Nordstrom and Saks. The value of the inventory turnover increasing from 2012 to 2013 for both Nordstrom and Saks is important to note, which means that the companies are attracting clientele with the most current apparel. Nordstrom wins against Saks in increasing sales growth, with a solid 3% rate. Within Nordstrom's 10-K, the company disclosed that its expansion plan has increased sales over the past several years. The Gross Profit Ratio indicates how much a company can reduce its merchandise without incurring a loss, and Saks is able to reduce its merchandise at a slightly higher percentage than Nordstrom. The EBIT ratio and the Net Income ratio both show the current profitability of the companies, in which Nordstrom's rate is much higher than Saks in the two areas of profitability. The SG&A ratio for both companies are relatively similar and have remained stable; therefore, compared to each other the expenses appear to be normal. Compared to the market and the industry, Nordstrom is considered to be a large cap stock, whereas Saks is considered to be mid cap and the Apparel industry as a whole is small cap. Macy's, one of Nordstrom and Saks' largest competitors, surpasses the competition and industry in total revenue, with Nordstrom as a not-so-close second in this comparison. Although Nordstrom is a much larger company than Saks, it is only half the size as Macy's. Macy's net income and revenue is twice that of Nordstrom, and has almost three times as many employees. It is important to note that one of Nordstrom and Saks' competitors, Dillards, did have the highest earnings per share within this subsection of the market and industry, showing the competitive nature of this industry despite the lower statistics