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Neiman’s Rolls On: Income Up 15.9%

The Neiman Marcus Group's third-quarter results got a big boost from full-price selling, while showing that the luxury sector is still red hot.

NEW YORK — The Neiman Marcus Group Inc.’s third-quarter results got a big boost from full-price selling, while showing that the luxury sector is still red hot.

The company also said it expects to close on its acquisition by private investors in November.

On Wednesday, the retailer posted net income for the quarter ended April 30 that rose 15.9 percent to $79.8 million, or $1.61 a diluted share, from $68.8 million, or $1.40, in the same year-ago quarter. Revenues were up 6.9 percent to $933.4 million from $873.2 million. Sales at specialty retail stores, which include Neiman Marcus and Bergdorf Goodman, climbed 6.8 percent to $767 million from $718 million, while same-store sales gained 6.5 percent. Sales at the direct marketing division gained 3.1 percent to $130 million from $126 million. The balance of the revenues came from the division that includes the operations of Kate Spade and Laura Mercier brands.

“We maintained our focus on full-price selling, which contributed to higher-than-originally anticipated sales for the quarter. In addition, our inventory remains in excellent shape due to our disciplined inventory management. The combination of these efforts led to both record operating earnings and operating margin for the quarter,” said Burt Tansky, president and chief executive officer, in a statement.

The company posted results after market, and did not host a conference call.

As reported, the high-end firm said on May 2 that it will be sold for $5.1 billion to an investment group consisting of Texas Pacific Group and Warburg Pincus LLC. Under the terms of the purchase agreement, the two investment firms will acquire all of the outstanding Class A and Class B shares of the retailer for $100 a share in cash. It is expected that each of the investors will own equal stakes in the company upon completion of the transaction.

Still up for sale is its credit card business, which is expected to fetch about $500 million. American Express and Citibank have reportedly put in bids.

Separately, the retailer reported monthly sales. For May, revenues rose 10.2 percent to $269 million from $245 million, while same-store sales rose 11 percent. “Revenue growth trends were the strongest in the company’s stores in the Southeast, West and Northeast, [while] the merchandise categories in the specialty retail stores segment that performed the strongest included jewelry, women’s contemporary sportswear and fine apparel, designer handbags, accessories and men’s,” the company said.

The retailer operates two Bergdorf Goodman stores in Manhattan as well as Neiman Marcus stores throughout the country. The company said its deal to sell to the investment group is expected to close in November.

For the nine-month period, net earnings jumped 16.4 percent to $214.5 million, or $4.34 a diluted share, from $184.2 million, or $3.78, in the same year-ago period. Revenues rose 8.4 percent to $2.97 billion from $2.74 billion. Revenues at the specialty store division increased 9.1 percent to $2.42 billion from $2.21 billion, while direct marketing sales rose 3.1 percent to $459 million from $445 million.