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On May 9, 2025, Nordstrom, Inc. (NYSE:JWN), the $4.1 billion retail giant trading near its 52-week high of $24.99, disclosed in a regulatory filing that a class action lawsuit was filed against the company and various defendants in relation to its pending merger. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value estimates. The complaint, lodged by a Nordstrom shareholder in the Superior Court of Washington, alleges breaches of fiduciary duty among other claims and seeks declaratory relief and damages.
The lawsuit, titled Trice v. Nordstrom, Inc. et al., comes after Nordstrom’s definitive proxy statement was filed on April 10, 2025, concerning the company’s special shareholder meeting scheduled for May 16, 2025. The meeting is set to discuss the merger agreement with Norse Holdings, Inc. and Navy Acquisition Co. Inc., which would result in Nordstrom becoming a wholly-owned subsidiary of Norse Holdings.
The complaint questions the merger’s compliance with Washington’s moratorium statute, suggesting it should be conditioned on the approval of two-thirds of unaffiliated shareholders. It also accuses Liverpool, part of the buying consortium, of breaching a non-disclosure agreement and asserts that Erik and Peter Nordstrom interfered with the agreement, constituting tortious interference. Despite these legal challenges, InvestingPro data shows Nordstrom maintains strong financial health with a "GOOD" overall rating, supported by an 18% free cash flow yield and annual revenue of $15.02 billion.
Nordstrom has stated its intention to vigorously defend against the lawsuit and any additional lawsuits that may arise from the merger. The company’s filing with the SEC on May 12, 2025, is intended to provide shareholders with information directly related to the ongoing legal proceedings.
The outcome of the lawsuit remains uncertain, with Nordstrom cautioning that the legal process could have material effects on its operations and financial results. The company’s definitive proxy statement and any further disclosures regarding the proposed merger can be accessed through the SEC’s website or Nordstrom’s investor relations page. With its next earnings report due on May 29, 2025, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which offer expert analysis on over 1,400 US stocks.
In other recent news, Nordstrom Inc . reported its fourth-quarter earnings, revealing normalized earnings of $1.10 per share, which exceeded consensus estimates by $0.17. The company generated $4.32 billion in revenue, slightly missing expectations by $5 million. Nordstrom is also preparing for a significant merger with Norse Holdings, Inc., with a special meeting of shareholders set for May 16, 2025, to approve the merger. As part of the merger process, Nordstrom has announced a potential special dividend, contingent on the merger’s completion. Additionally, Nordstrom has communicated a temporary suspension of certain transactions in its 401(k) Plan, aligning with the upcoming merger.
CFRA analyst Zachary Warring upgraded Nordstrom’s stock rating from Sell to Hold, raising the price target to $24, based on anticipated improvements in operating metrics. The analyst maintains a fiscal year 2026 EPS estimate of $2.00, reflecting a more favorable outlook for the company. Meanwhile, Cathy R. Smith, previously Nordstrom’s CFO, has been appointed as Starbucks (NASDAQ:SBUX)’ new chief financial officer, bringing her extensive experience to the role. These developments mark a period of transition and strategic moves for Nordstrom as it navigates its future trajectory.
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