NEIMAN MARCUS GROUP INDICATES EARNINGS WILL DECLINE 19 PERCENT FOR SECOND PERIOD
NEW YORK — The Neiman Marcus Group Inc., blaming the highly promotional climate during the holiday season, said earnings will drop below year-ago levels in its second quarter ending Jan. 27.
However, Robert J. Tarr Jr., president and chief executive officer, noted that NMG expects earnings “for the full fall season to approximate those of a year ago — a level of performance which will compare very favorably to others in the industry.” Flat earnings for the fall season — which consists of NMG’s first and second quarters — implies second-quarter earnings of 38 cents a share, down from 47 cents a year earlier. That represents a decline of about 19 percent.
Speaking Friday at NMG’s annual meeting at the company’s headquarters in Chestnut Hill, Mass., Tarr said gross margins during December were “significantly lower” than December 1994’s levels.
“Concern over store traffic and competitor markdowns caused both Neiman Marcus stores and Bergdorf Goodman to increase promotional activity and to accelerate markdowns from January into December,” he said.
An NMG spokesman noted that margin pressure was felt at both Neiman Marcus and Bergdorf Goodman. NM Direct catalog is having a “good quarter” and should show higher profits, according to the spokesman.
In the first quarter of the current fiscal year, NMG reported earnings from continuing operations of 47 cents a share against 38 cents a year ago. A year earlier, NMG had earnings per share from continuing operations of 85 cents a share for the full fall season. Harcourt General Inc. controls 66.5 percent of NMG.