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Retailer Nordstrom, Inc. (NYSE:JWN), currently valued at $4.1 billion in market capitalization, announced that its shareholders have approved a merger agreement with Norse Holdings, Inc. and its subsidiary, Navy Acquisition Co. Inc. The approval came during a special meeting held virtually on Friday. This paves the way for Nordstrom to become a wholly owned subsidiary of Norse Holdings. According to InvestingPro data, the company’s stock is trading near its 52-week high of $24.99, with strong financial metrics including an 18% free cash flow yield.
The merger was first announced on December 22, 2024, and since then, Nordstrom and Norse Holdings have been working towards finalizing the deal. The merger is expected to close around May 20, 2025, subject to the satisfaction or waiver of remaining conditions. The company enters this transition period in solid financial health, maintaining a healthy current ratio of 1.19 and trading at a reasonable P/E ratio of 13.74.
In anticipation of the merger’s completion, Nordstrom’s Board of Directors has declared a special cash dividend and a "stub period" dividend for its shareholders. The special dividend is set at $0.25 per share, provided that the company’s cash on hand is not less than $410 million immediately before the merger’s effective time. Additionally, a stub period dividend will be calculated based on the number of days from the last quarterly dividend record date to the day before the merger becomes effective. This comes on top of Nordstrom’s existing 3.1% dividend yield. For deeper insights into Nordstrom’s financial health and valuation metrics, including exclusive ProTips and comprehensive analysis, visit InvestingPro.
The record date for determining shareholders entitled to receive these dividends is set for May 19, 2025, with the dividends contingent upon the closing of the merger. If the merger is finalized on May 20, 2025, the stub period dividend would amount to $0.1462 per share, and the payment date for both dividends would be May 27, 2025. The company’s strong financial position, with $294 million in net income over the last twelve months, supports these dividend payments.
Shareholders must retain their shares through the conclusion of trading on the date of the closing to be eligible for the dividends. However, as the payment of the dividends is contingent upon the merger’s completion, there is no guarantee that they will be paid.
This strategic move is subject to the final results of the special meeting, which will be disclosed in a subsequent Form 8-K filing. Nordstrom’s transition into a private entity under Norse Holdings is seen as a significant step in the company’s evolution. The information provided is based on a press release statement.
In other recent news, Nordstrom announced its fourth-quarter earnings, reporting normalized earnings of $1.10 per share, which exceeded consensus estimates by $0.17. The company generated revenues of $4.32 billion, slightly missing expectations by $5 million. Nordstrom is also in the process of a merger with Norse Holdings, Inc., which would make it a wholly-owned subsidiary. A class action lawsuit has been filed against Nordstrom in relation to this pending merger, with allegations of fiduciary duty breaches and other claims. The company has set May 19, 2025, as the record date for potential dividends contingent on the merger’s completion. In addition, CFRA analyst Zachary Warring upgraded Nordstrom’s stock rating from Sell to Hold and increased the price target to $24.00, anticipating improved operating metrics. Nordstrom has also notified employees of a temporary trading suspension for its 401(k) Plan, linked to the upcoming merger. Lastly, insights from the Shoptalk 2025 event, attended by Nordstrom executives, highlighted a positive outlook for the retail industry, emphasizing advancements in AI and machine learning.
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