Neiman Marcus Group revenues for the third quarter fell 9% to $1 billion, on the back of increased promotional activity used to offset weaker demand for luxury goods, according to a Bloomberg report.
The Dallas, Texas-based retailer saw earnings before interest, taxes, depreciation and amortisation drop to $124 million for the quarter ended April 29, down 25% from the same period last year.
The luxury department store’s comparable store sales increased 11%, compared to the third quarter of 2019, but was down 5% from last year, according to the report.
“Gross margins are challenged due to the highly promotional environment and our own levels of excess owned inventory, which will be back in balance by the end of the fiscal year. This impact is being partially offset by strong cost management,” a Neiman Marcus spokesperson told Bloomberg.
Management added that the company’s gross margin for the fourth quarter will likely decline at the same pace seen during the second quarter.
Accounting for incremental liquidations in the second quarter, that would mean a roughly 740 basis points decline compared to a year earlier. Looking ahead, the company will likely end the year with a net debt to Ebitda ratio of roughly 4 times, Bloomberg added.
The earnings update comes at a time when the high-end retailer continues to partner with luxury marques across its flagship stores. In May, the company announced its new Givenchy Plage activation, which followed a tie-up with fellow French fashion house, Balmain, for another summer collection and activation.
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