Despite the company’s $4.4 billion in debt, Neiman Marcus Group closed out the fourth quarter on an upward sales trend.
In a Nutshell:
Neiman Marcus, which operates its namesake stores as well as Bergdorf Goodman, reported its fourth consecutive quarter of positive sales.
Inventory in the U.S. was down 7 percent compared to last year “due to deliberate inventory management and an increased focus on operating with a more efficient base,” according to CEO Geoffroy van Raemdonck. He also noted Neimans reduced markdowns by 200 basis points during the quarter and increased full-price selling resulting in “healthy gross margin performance.”
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As van Raemdonck ticked off the positive attributes of the business, he noted the retail group’s limited number of brick-and-mortar stores as well as the company’s nearly even split between older shoppers and GenX and millennial shoppers.
Those characteristics aside, he said an assessment of the business revealed the need for further e-commerce and supply chain enhancements, which the company is undertaking and expects to have in place by 2020.
Neimans continues to strive toward deeper customer relationships and seamless shopping experiences. Further, the retailer acknowledges it must create “magic” throughout its assortment, clienteling and storytelling. “It’s not enough to be omni luxury. Consumers demand that retailers be predictive and purposeful in how they leverage each channel to communicate and enable shopping or browsing,” van Raemdonck said.
Sales:
Revenue for the quarter reached $1.1 billion, representing a 2.3% increase over the prior-year period. Comp revenue for the full year was up 4.9% to $4.9 billion.
E-commerce traffic increased 15 percent during the quarter, boosting sales by 12.5%. Online transactions accounted for 36 percent of the company’s total business.
Earnings:
Neimans reported a net loss of $75.3 million for the quarter compared to a $366.3 million loss during the fourth quarter last year.
The retail group reported net earnings for FY18 of $251,131, compared to a $531,759 million loss during the same period of FY17.
CEO’s Take:
“The fourth quarter was in-line with our expectations and marked our fourth consecutive quarter of positive sales increases,” said van Raemdonck. “As we look to the future, we are making long-term investments in technology, supply chain and new customer centric capabilities that will begin to benefit the business in fiscal 2020 and beyond. Our multi-year strategic plan is designed to both protect and advance our existing business, while also positioning Neiman Marcus Group for long-term growth.”
