Despite making progress, Nordstrom has not yet fully recovered.

• The department store chain, Nordstrom, is experiencing rising share prices after predicting profits and revenue growth for the upcoming year.
• Omar Saad, an Evercore ISI analyst, believes that Nordstrom's negative sentiment is due to its poor performance at its off-price Rack business.
• In the most recent quarter, Nordstorm made "baby steps," which was sufficient to significantly boost its stock price.

The department store chain's upbeat outlook for the coming year, forecasting profits and single-digit revenue growth, has caused shares to soar.

In recent days, other retailers such as and have provided better-than-expected full-year forecasts, indicating that they anticipate continued consumer momentum as people resume social activities and return to offices.

Nordstrom's market cap reached $4.3 billion after its shares closed up 37.8% on Wall Street, making it the strongest reaction seen on the stock exchange.

Omar Saad, an Evercore ISI analyst, believes that Nordstrom's recent negative sentiment is due to poor performance at its off-price Rack business. Despite this, Nordstrom made "baby steps" in the latest quarter, which was enough to give its shares a massive lift.

While Nordstrom's full-line department store business is essentially flat compared to 2019 pre-pandemic levels, the company still has significant growth potential, particularly in its Rack business, where net sales remain below the 2019 levels.

Nordstrom's stock has fallen over 30% in the past six months, while Macy's stock has risen 8% and Kohl's stock has decreased less than 1%. Additionally, Nordstrom is currently one of the most heavily shorted stocks, with 22% of its shares being sold short.

Simeon Siegel, a BMO Capital Markets analyst, concurred with Saad's viewpoint. He praised Nordstrom for finishing the year on a stronger note than it began.

BMO is not recommending the stock because it's uncertain whether Nordstrom will meet its full-year targets or if it's a one-time achievement.

Nordstrom's stock price is predicted to reach $30 by BMO, which is an increase from its Tuesday closing price of $19.54.

Nordstrom's Rack division has faced challenges in securing merchandise during the pandemic due to supply chain disruptions. The division relies on other apparel brands to provide excess inventory for discounted sales, but there has been limited excess inventory available.

Erik Nordstrom, CEO of Nordstrom, stated on a recent call that the company conducted a comprehensive analysis of the Rack segment. As a result, the company is now focusing on increasing brand recognition, expanding its inventory, and providing a broader selection of pricing options.

He stated that he was confident in the ability to profitably expand their Rack business and wouldn't be content until it was achieved.

Nordstrom anticipates an increase in urban shopper visits in the upcoming months, as international tourism has decreased, resulting in lower foot traffic in these areas compared to suburban locations.

The company stated that its clothing and footwear categories, which make up more than 70% of its business, are still below the 2019 levels.