- Neiman Marcus reported Wednesday that third quarter total revenue increased 4.8% year over year to $1.17 billion and comparable sales increased 6%, according to a press release. The upscale department store retailer also narrowed its net loss to $19.9 million, down 20% from the year-ago period.
- For the year so far, Neiman's total revenue has increased 5.1% year over year to $3.77 billion, and comps have increased 5.7%. The company said in the release that Q3 (which ended April 28) marked the third straight quarter of year-over-year revenue increases.
- "Our strategy is working, so we will continue to be laser-focused on areas that set us apart from competitors — innovation that enhances the customer experience, a strong high-performance culture and new partnerships with both emerging and industry-leading luxury brands," CEO Geoffroy van Raemdonck said in a statement, adding that the retailer's customers "trust us to be a curator of trends."
By many measures, Neiman had an excellent Q3. The company's top-line and comps improved by some of the largest amounts seen in the most recent quarter among department store retailers. The company's operating earnings increased 32% year over year to $50.7 million in Q3.
Unfortunately for the company, its interest expenses increased as well — to about $ 77.7 million — and are still higher than Neiman's operating profit.
Neiman's debt load has weighed on the company for years. Its total long-term liabilities stand at about $6 billion, of which $4.47 billion is long-term debt. Neiman has showed 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%.
But the company's Q3 results, as well as those from Q2 and previous quarters, provide plenty of reason for hope. In March, the retailer reported a 6.7% increase in comps during the period that included the holidays, which Neiman said then was "supported by the company's 'Digital First' strategy and recent investments in new technologies and marketing tools." Although, Neiman also had to downgrade the value of its brand, recording in fiscal 2017 non-cash impairment charges of $153.8 million.
Van Raemdonck said then that the strategy, unveiled in October, had helped further its position in the luxury retail space "by anticipating customers' evolving behaviors and engaging them more deeply to drive traffic online and in stores."
To drive traffic to stores, Neiman has also 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 important efforts to change 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 about 25% to focus on its position as a luxury seller.