Neiman Marcus sees Q3 sales and profit tumble
- Q3 earnings down 81% to US$3.8m
- Gross margin narrows 1.70 ppts
- Total sales down 4.2% to US$1.17bn
Upscale department store retailer Neiman Marcus has booked a third consecutive fall in quarterly sales – and an 81% drop in profit – as it struggles to attract shoppers into its stores.
Total revenues fell 4.2% in the three months to the end of April to US$1.17bn, from $1.22bn a year earlier. Comparable sales were down 5% as the retailer battles a slowdown in apparel spending in-store in favour of online shopping.
Unseasonably cool weather also dampened sales of spring wear for many major apparel retailers during the last quarter. Consequently, Neiman Marcus saw gross margins narrow by 1.70 percentage points as a result of higher markdowns to clear excess inventory. Net earnings plummeted 81% to $3.8m from $19.8m a year ago.
Chief executive Karen Katz cited the overall economic outlook, combined with uncertainty related to fluctuations on the US stock market and the upcoming presidential elections as having tempered the outlook for shoppers and their enthusiasm for shopping.
In October last year, the company cut around 500 jobs across the group as part of plans to free up funds to accelerate investment. It also delayed plans for an initial public offering.
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