Strong sell-throughs of higher-end merchandise enabled the luxury retailer to post nearly a 35 percent increase in fourth-quarter profits and crack the $3 billion sales milestone for the year.
“Our customers are very loyal,” Burt Tansky, president and chief executive officer, told Wall Street analysts on a conference call. “We see no signs of them trading down.”
For the three months ended Aug. 2, income soared 34.9 percent to $7.2 million, or 15 cents a diluted share, from $5.3 million, or 11 cents, in the year-ago quarter. The company, which had forecast earnings per share of between 8 cents and 13 cents, bested the high end of its own forecast by 2 cents and Wall Street consensus expectations by 3 cents.
Excluding the impact of certain items, adjusted earnings for the fourth quarter of fiscal 2002 were $6 million, or 13 cents a diluted share. The adjustments included the closure of the Neiman Marcus Galleries store in Seattle last year, the write-off of the firm’s investment in weddingchannel.com and the write-down of fixed assets of three Kate Spade retail stores.
Revenues in the quarter grew 5.4 percent to $702.7 million from $666.4 million. Revenues for the specialty retail stores segment, comprising Neiman Marcus Stores and Bergdorf Goodman, were up 4.2 percent to $576 million from $553 million.
Comparable-store sales at Neiman Marcus rose 5.2 percent and, particularly gratifying as the second anniversary of the 9/11 terrorist attacks nears, 16.2 percent at Bergdorf Goodman. Revenues at Neiman Marcus Direct, which includes catalog and Internet sales under the Neiman Marcus, Horchow and Chef’s nameplates, were up by 9.4 percent, although online purchases were the primary driver over catalog sales.
The fourth quarter of 2002 included an extra 14th week, but comps were calculated on the basis of a 13-week quarter in both years.
NMG shares fell 2 cents, or 0.1 percent, to end Tuesday’s New York Stock Exchange session at $40.55, but that was a strong performance compared with the overall showing of apparel and retailing stocks, which were overtaken by selling pressures following a series of downgrades, most notably by Goldman Sachs, and a downward earnings revision by Russell Corp. While the Dow Jones Industrial Average declined 79.09 points, or 0.8 percent, at 9,507.20, with similar declines registered by the Standard & Poor’s 500 and the Nasdaq, the S&P Retail Index ended the day with a 3.1 percent falloff at 350.91.