Dive Brief:
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Neiman Marcus Group on Thursday said it met its own expectations for Q3 and has made progress since before the pandemic. But due to a highly promotional environment and its own excess inventory, “gross margins are challenged,” a spokesperson said by email.
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Comp sales in both Q2 and Q3 rose 11% compared to 2019, though in Q3 they dropped year over year as the department store “lapped the pent up demand coming out of the pandemic last spring,” the spokesperson said.
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The luxury retailer said in Q3 it achieved “strong cost management," double-digit adjusted EBITDA margin and liquidity above $1 billion. Sales of the retailer’s top 50 brands rose 39% from 2019, with luxury customers most engaged and online-only customers less so, the company said.
Dive Insight:
The volatility at Neiman Marcus in recent weeks indicates that even some higher-income consumers are somewhat wary amid economic uncertainty.
Citing a Tuesday earnings call and unnamed sources, Bloomberg reported that Q3 revenue fell 9% year over year as EBITDA tumbled 25% to $124 million. The spokesperson, noting the company’s obligations as a private entity, said the company is unable to confirm those additional details. The department store emerged from bankruptcy in 2020 under private ownership.
But the spokesperson noted that the company’s goals are on track and that inventory levels will be back in balance by the end of the fiscal year.
“Underlying these trends is outperformance of our top customers, brands and stores, all in line with our long-term objectives,” the spokesperson told Retail Dive. “We believe that our business model and focused strategies catered to the luxury customer put us in a position of strength to deliver long-term sustainable and profitable growth.”
Neiman Marcus’ soft engagement online tracks with recent reports from other apparel-focused retailers. In Nordstrom’s most recent quarter, e-commerce fell 17%, at Macy’s e-commerce fell 8% and at Gap Inc. e-commerce fell 9%.
That may put it in a better position than rivals that separated their e-commerce operations into stand-alone businesses during a period of soaring online sales. Neiman Marcus CEO Geoffroy Van Raemdonck in 2021 dismissed the idea, which had caught on with HBC-owned department stores Saks Fifth Avenue and Hudson’s Bay Co., and its off-pricer, Saks Off 5th. Those three online retail companies announced layoffs early in this year amid wider downsizing in tech.
In February, Neiman Marcus also announced plans to lay off about 5% of its workforce.
