Dillards, Inc versus Nordstrom, Inc. FI305.001 Michelle Miller, Phillip Stowe, Daniel Carr Table of Contents Firm Overview………………………………………………………………………………..3 Critique………………………………………………………………………………………..4 Financial Statements and Ratios…………………………………………………………..8 Firm Overview Nordstrom’s and Dillard’s are both retail stores categorized within the family clothing retail industry. They fall into this category because they each provide clothing lines for men, women and children; they exemplify the marketing trope: for “the whole family”. This industry is very competitive with as many as thirty-seven firms and total estimated annual revenues of $125,904,840,000 (http://bi.galegroup.com/essentials/industry/448140?u=bentley_main). Retail giants like TJX, H&M and Gap are the top players of this industry with Nordstrom vying for the fourth largest market share and Dillard’s further down on the list. The success of Nordstrom Inc with respect to …show more content…
Dillard’s has a better earnings per share, yet again this is reflective of corporate strategy rather than reality. Dillard’s decision to buyback most of its shares has grossly diminished its shares outstanding which creates a higher EPS. Dillard’s also made the decision not to issue high dividends to shareholders and this is reflected in their DPS which is about one sixth of Nordstrom’s. Not only do the ratios show that Nordstrom is better at issuing dividends, they also show Nordstrom’s ability to create value in the market. Dillard’s buyback strategy has created a scenario in which their shares market value and book value barely differ. Conversely, Nordstrom has been able to produce value in the market, which is reflected in their high market-to-book ratio. Because of this, investors using these ratios will be more likely to seek equity in Nordstrom’s rather than