It was a tough first quarter for Neiman Marcus as sales dropped 1.8 percent, while comps were down nearly 6 percent.
The Dallas-based department-store chain posted a steep net loss of $10.5 million, compared with last year’s first-quarter profit of $196,000.
Like many of their peers in the retail sector, Neiman Marcus’ management attributed much of its softer Q1 performance to a challenging economic environment.
“Taken separately, or even in combination, broader economic factors are clearly putting pressure on our near-term results,” Karen Katz, Neiman Marcus’ president, CEO and director, said during the firm’s conference call. “Although our first-quarter results are disappointing, we are taking the necessary steps in response to this environment. Our team is working very hard, and we know what we need to do to navigate through this period of tough business.”
Katz noted that lower crude-oil prices have affected the disposable income of many of the chain’s wealthy clients, along with FX headwinds, were among the quarter’s biggest challenges.
In October 2014, Neiman Marcus acquired Germany-based luxury retailer MyTheresa, which does the bulk of its business through its website, MyTheresa.com. (The e-tailer won FN’s Retailer of the Year award for 2015.)
Recently, Neiman Marcus — which was snapped up in 2013 by Ares Management LLC and Canada Pension Plan Investment Board (CPPIB) for $6 billion — made its second attempt at potentially selling its shares to the public. In August, the company filed a registration for an initial public offering with the Securities & Exchange Commission.
It is unclear whether the firm still plans to move forward with the IPO.
Net Income: Neiman Marcus posted a net loss of $10.5 million for the quarter ended on Oct. 31, 2015, compared with net income of $196,000 in last year’s comparable quarter.
Net Revenue: Net revenue declined 1.8 percent year-over-year, to $1.16 billion, from $1.19 billion in the year-ago quarter.
Executive Insights: “Our team is working very hard, and we know what we need to do to navigate through this period of tough business. We are directed and focused on our day-to-day operations in serving our customer. We’ve enhanced our marketing and sales promotions to drive sales, while we remain focused on managing our inventories and our expenses.”
— Katz during the Q1 conference call