Neiman Marcus on Tuesday reported that total fourth quarter revenues reached $1.1 billion as comparable sales rose 2.3% year over year. The department store trimmed its net loss in the quarter to $75.3 million from a $366.3 million net loss a year ago, which included a $357 million non-cash impairment charge to lower the value of the business, according to a company press release.
Fourth quarter online revenues rose 12.5% and accounted for 36% of the department’s stores business. Lower markdowns and "strong inventory management" helped what CEO Geoffroy van Raemdonck deemed "healthy gross margin performance" in the quarter, according to his statement.
For the full fiscal year 2018, the company reported total revenues of $4.9 billion, amid a 4.9% comp sales rise. Neiman’s net earnings reached $251.1 million, compared to a net loss of $531.8 million last year. The company has $4.4 billion in long-term debt, according to the release. Neiman Marcus also announced Tuesday that Chief Financial Officer Adam Orvos has taken on the additional role of chief operating officer, along with several other personnel moves.
The strong economy may be providing Neiman Marcus with a little breathing room. The upscale department store has a massive debt load to contend with but managed to significantly narrow its losses in the fourth quarter.
"The fourth quarter was in-line with our expectations and marked our fourth consecutive quarter of positive sales increases," van Raemdonck said in a statement on Tuesday. "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."
Neiman's debt load has weighed on the company for years. The department store has shown up on numerous credit watch lists, and data from CreditRiskMonitor puts the risk of Neiman filing for bankruptcy in the next 12 months at between 9.99% and 50%.
To drive traffic to stores, Neiman has recently launched a project called the "Idea Factory", which the company described in a tweet as "an array of concepts, products and experiences — from piercing and personalizing of fashion products, to candle-making, epicure and custom-mixing beauty creams."
Along with efforts like that to improve its image and alter its sales trajectory, Neiman has taken painful steps to return to profitability. The department store cut 225 jobs last July and decided to scale back its off-price footprint by 25% to focus on its position as a luxury seller.