Neiman Triples Profits

By Don Hogsett -- Home Textiles Today, 9/13/2004 12:00:00 AM

Dallas —

Fueled by a double-digit gain in same-store sales in a thriving market for luxury goods, as well as stronger margins and lower costs, fourth fiscal quarter profits virtually tripled at The Neiman Marcus Group Inc., shooting up 187 percent, to $20.6 million from $7.2 million last year.

Sales at the nation's premier carriage-trade retailer increased 12.3 percent, to $789 million from $702.7 million, while the crucial gauge of same-store sales jumped 12.5 percent.

The Neiman Marcus Group operates the tony Neiman Marcus and Bergdorf Goodman nameplates, as well as the Kate Spade and Laura Mercier brands.

Driving the surge at the bottom line, in addition to the stronger comps, was the combination of bulked up margins and lower costs. Average gross margin improved 140 basis points, or 1.4 percentage points, to 30 percent from 28.6 percent the preceding year.

Gross margin dollars increased 17.6 percent, to $236.7 million from $201.3 million the year before. Costs, when measured as a percentage of sales, were whittled 160 basis points, or 1.6 percentage points, to 24.7 percent from 26.3 percent.

Stockpiles remained in check, rising far slower than sales. Inventories increased just 4.8 percent, to $720.3 million from $687.1 million, substantially beneath the 12.3 percent rate of sales growth.

The Neiman Marcus Group Inc.