NEW YORK — Neiman Marcus Group blew out the lights in the third quarter.
The specialty retailer on Wednesday posted a 67.4 percent jump in income for the three months ended May 1, along with an 80.4 percent spike in profits for the corresponding nine months.
This story first appeared in the June 3, 2004 issue of WWD. Subscribe Today.
On a conference call with investors, Burt Tansky, president and chief executive officer, said shoppers at the retailer were not pulling back on their spending.
“We can see that through continued full-price selling, which is very strong this late in the season,” Tansky said. “Sales for fall goods [now hitting the sales floor] continue at breakneck speed. The trunk shows at Bergdorf Goodman have been remarkable in the amount of volume that they’ve generated. [Both] are very important signs for the upcoming season.”
Income for the quarter rose to $68.8 million, or $1.40 a diluted share, from $41.1 million, or 87 cents, in the same year-ago period. Total revenues rose 21.4 percent to $877.6 million from $722.9 million. Revenue results include a 22.2 percent gain in its specialty store operation to $722 million from $591 million, and an 11.5 percent jump in its direct-marketing operation to $126 million from $113 million. Revenues also included a 57.9 percent increase in its “other” segment, which the firm said incorporates the business operations of Kate Spade and Laura Mercier brands.
“During the past two challenging years, we continued to maintain our high standards for fashion quality and service,” Tansky said, adding that the company posted an overall comparable-store sales increase of 21 percent, which includes a 22 percent gain for the specialty store business and a 20 percent increase in direct marketing.
Tansky noted that color, print and novelty were the most important drivers in the quarter. Women’s handbags, driven by color, and contemporary sportswear — with key trend items such as denim, cropped pants and fine apparel — were strong selling categories in the period.
The ceo also gave credit to the firm’s buyers and merchandisers, whom he said were working closely with Neiman’s vendors and designers to ensure excitement in the merchandise mix, as well as to help differentiate the retailer in the market.
Tansky noted that the Bergdorf customer, in particular, has been “using her buying power [in a way] that we haven’t seen in a long time.”
One particular avenue of opportunity for Neiman’s is the rate of growth in its Internet business, which Tansky said is “growing at a very fast rate.” The ceo said online sales are expected to exceed $200 million in fiscal 2004, compared with $150 million last year.
The site most visited is Neiman’s. Other sites that are part of the business include Horchow and Chefs Catalog. Neiman’s said earlier this year that it was exploring options for the Chef’s business. In addition, the company is planning to add transactional functionality to its Bergdorf site by fall. The Bergdorf site is up, but currently only provides information such as location, store events and pictures of selected products.
Another opportunity for growth is the Kate Spade and Laura Mercier brands. Both had strong sales and profit growth, Tansky said. He added, “Each continues to develop as leading brands, expanding in both product and distribution.”
Separately, the company released May sales results, which showed an 8.5 percent comps gain driven by strong full-price selling.
For the nine months, income was $184.2 million, or $3.78 a share, up from $102.1 million, or $2.14, last year. In the year-ago period, the results included a $14.8 million charge in connection with a change in accounting principle. Total revenues were up 15.1 percent to $2.76 billion from $2.4 billion.