Neiman Marcus Says Its Stabilizing With Two Quarters of Positive Sales in a Row

Neiman Marcus posted a 6.2 percent sales increase during its Christmas quarter and said Friday its business is "stabilizing" and "positioned to grow" after two consecutive quarterly sales gains. New technologies, a "digital first" strategy and new marketing tools are supporting positive sales, the Dallas-based company said. Friday marks the first earnings report since Karen Katz stepped down as CEO last month after more than 30 years with the Dallas-based luxury retailer. Katz remains on the board. Her successor Geoffroy van Raemdonck has only been on the job since Feb. 12 and took over after the retailer's fiscal second quarter ended in January. Van Raemdonck is expected to be on a conference call with analysts this morning to review results. "I am excited about our momentum, which underscores Neiman Marcus Group is truly unique within our industry for our ability to deliver on a personalized luxury shopping experience across channels and brands," van Raemdonck said in a press release. "We will continue to innovate and invest in the business to envision new ways to serve the luxury customers of today and tomorrow."He's visited several Neiman Marcus stores since his hiring was announced in January. While Neiman Marcus has a fine fleet of stores, the company faces debt challenges similar to other retailers, saddled with debt from two sales to private equity buyers in 2005 and 2013. Its debt problems are similar to Toys R Us which filed bankruptcy last year and is now considering a liquidation. Adjusted profit, which is before interest, taxes and other items, was $154.8 million compared with $126.8 million a year ago. A non-cash income tax benefit of $384 million from the new federal tax cuts resulted in a profit of $372 million versus a loss of $117 million last year. As it has previously done in recent quarters, the company lowered the value of its Neiman Marcus brand on its books, this time by $154 million. Total sales increased 6.2 percent to $1.48 billion from $1.40 billion a year ago. Same-store sales, or sales that exclude results from stores opened and closed in the past 12 months, increased 6.7 percent. Neiman Marcus closed 10 Last Call stores this year. It also cut costs with staff cuts.In its fall quarter, Nieman Marcus posted its first sales increase in two years. Neiman Marcus has reported three annual losses in four years and van Raemdonck, 46, is facing a difficult debt restructuring soon. Analysts have called its almost $5 billion in debt unsustainable for a company with annual sales of $4.7 billion.  Continue reading...