Nordstrom, Inc. (NYSE: JWN) shares have taken a dive this week after the company reported second-quarter earnings and sales that remain below pre-pandemic levels.

On Tuesday, Nordstrom reported a second-quarter adjusted EPS of 49 cents on revenue of $3.66 billion. Both numbers exceeded analyst expectations of 27 cents and $3.36 billion, respectively.

Nordstrom revenue was up 96.7% from a year ago. Yet sales are still down about 6% from the second quarter of 2019. The company said sales from its anniversary sales event were up 1% from 2019 levels.

Nordstrom reported 30% online sales growth and said digital sales now represent about 40% of total revenue.

Looking ahead, Nordstrom raised its full-year revenue growth guidance from 25% to 35%, ahead of analyst estimates of 30%.

Peer-Lagging Performance: Morgan Stanley analyst Kimberly Greenberger said Nordstrom’s earnings recovery is on a “clouded path.”

“We see further stock price downside as revenue recovery appears protracted & cost inflation pressures EBIT margin, putting $2.40 consensus 2022e out of reach in our view,” Greenberger wrote.

BMO Capital Markets analyst Simeon Siegel said “2019 casts a long shadow” for Nordstrom.

“Of particular note, the anniversary sale was only 1% above FY19’s comparable sale, with ‘peer’ lagging performance at full and off price,” Siegel wrote.

Credit Suisse analyst Michael Binetti said Nordstrom’s numbers represent “significant lag vs. softline peers.”

“As we’ve looked ahead to the US retail re-opening, our thought was that JWN’s 2021 Anniversary Sale could be one of the biggest events in the sector, but the event was only +1% vs ‘19 (for context, URBN’s Anthropology just reported 2Q revs +15% vs ‘19),” Binetti wrote.

Profitability Targets Within Reach: Telsey Advisory Group analyst Dana Teslsey said Nordstrom will have to do better to justify its valuation, which is higher than its peer group and its own historical levels.

“Looking ahead, JWN can benefit from its exposure to the off-price channel, a profitable digital presence that continues to grow, and a pruned portfolio of full-line stores that can provide an alternative retail experience and accelerated operational efficiencies,” Telsey wrote.

KeyBanc analyst Edward Yruma said Nordstrom’s second-quarter numbers suggest its 2022 profitability targets are well within reach.

“2Q is unlikely to satisfy the near-term bulls given the continued expense pressure, but we think the Company made continued progress against its long-term initiatives, and we think further reinforced its position as the premier multi-brand premium/luxury retailer,” Yruma wrote.