The Neiman Marcus Group Reports Third Quarter Earnings <a name="MRR"></a>
CHESTNUT HILL, Mass.--(BUSINESS WIRE)--May 23, 2001--The Neiman Marcus Group, Inc. (NYSE:NMG.A, NMG.B) today reported diluted earnings per share of $0.80 on total revenues of $681.5 million in the third quarter of fiscal 2001.
For the 13 weeks ended April 28, 2001, total revenues declined 0.3 percent from $683.8 million in the year-ago period. Comparable revenues decreased by 1.4 percent. Operating earnings were $66.5 million compared to $79.8 million a year ago. Diluted net earnings per share were $0.80 on net earnings of $38.2 million with fewer shares outstanding compared to net earnings of $45.2 million, equal to $0.94 diluted earnings per share in the prior-year period.
For the 39 weeks ended April 28, 2001, total revenues rose 4.1 percent to $2,322.1 million from $2,230.3 million a year ago. Comparable revenues increased 3.4 percent. Operating earnings were $220.1 million compared with $223.9 million a year ago. Net earnings before cumulative effect of an accounting change were $126.2 million, equal to $2.65 per diluted share compared with net earnings of $123.9 million, or $2.53 per diluted share in the prior-year period.
"As expected, a challenging retail environment led to an essentially flat top line in the third quarter, while incentives and markdowns put pressure on margins," said Burton M. Tansky, chief executive officer.
Third quarter SG&A expense decreased in dollars and as a percentage of revenues compared to last year. This decrease reflects an ongoing cost reduction initiative to help offset lower sales growth and position the company for the future.
In the Specialty Retail Store segment, third quarter revenues of $572.6 million declined 1.4 percent from $581.0 million a year ago. Total revenues at Neiman Marcus Stores declined 1.6 percent in the quarter, with comparable revenues down 2.9 percent. Bergdorf Goodman posted a 0.4 percent decline in total and comparable revenues.
Specialty Retail Store segment operating earnings declined to $63.8 million from $80.6 million a year ago arising primarily from lower gross margins on higher markdowns taken at Neiman Marcus Stores and Bergdorf Goodman.
Third quarter revenues at Neiman Marcus Direct were $88.0 million, up 3.2 percent from $85.2 million in the year-ago period. Strong sales gains in the Chef's Catalog and Horchow businesses were partially offset by weaker sales in NM apparel.
Operating earnings in the direct marketing segment were $6.7 million compared with $7.1 million a year ago, reflecting lower gross margins and higher expenses primarily related to increased paper and circulation costs.
Revenues related to the company's brand development initiative rose slightly in the quarter, and NeimanMarcus.com revenues nearly quadrupled compared to a year ago.
"We are planning for a 3 to 4 percent comparable revenue growth in the fourth quarter, with higher markdowns necessary to clear inventory," said Mr. Tansky.
Inventories at the end of the quarter were $696 million compared to $623 million a year ago.
The Neiman Marcus Group includes the Specialty Retail Stores segment, which consists of Neiman Marcus Stores and Bergdorf Goodman, and the Direct Marketing segment.
The Company will host a conference call today at 9:00 am (EDT) to review these results. Interested parties may access www.neimanmarcusgroup.com to listen to a live broadcast.
The figures are as follows:
Statements in this release referring to the expected future plans and performance of the Company are forward-looking statements. Actual future results may differ materially from such statements. Factors that could affect future performance include, but are not limited to: changes in economic conditions or consumer confidence; integration of acquired businesses; changes in consumer preferences or fashion trends; delays in anticipated store openings; adverse weather conditions, particularly during peak selling seasons; changes in demographic or retail environments; competitive influences; significant increases in paper, printing and postage costs; and changes in the Company's relationships with designers and other resources. For more information, see the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.
THE NEIMAN MARCUS GROUP, INC. CONSOLIDATED STATEMENTS OF EARNINGS (In thousands For the Thirty-Nine For the Thirteen except for per share Weeks Ended Weeks Ended amounts) April 28, April 29, April 28, April 29, 2001 2000 2001 2000 (Restated) (Restated) Revenues $ 2,322,102 $ 2,230,255 $ 681,545 $ 683,829 Cost of goods sold, including buying and occupancy costs 1,503,757 1,432,877 441,181 427,120 Selling, general and administrative expenses 585,569 561,302 169,418 172,545 Corporate expenses 12,697 12,169 4,477 4,402 Operating earnings 220,079 223,907 66,469 79,762 Interest expense (11,869) (17,827) (3,518) (5,038) Earnings before income taxes, minority interest and cumulative effect of accounting change 208,210 206,080 62,951 74,724 Income taxes (79,120) (78,310) (23,922) (28,395) Earnings before minority interest and cumulative effect of accounting change 129,090 127,770 39,029 46,329 Minority interest in net earnings of subsidiaries (2,845) (3,891) (847) (1,149) Earnings before cumulative effect of accounting change 126,245 123,879 38,182 45,180 Cumulative effect of accounting change, net 1,860 -- -- -- Net earnings $ 128,105 $ 123,879 $ 38,182 $ 45,180 Weighted average number of common and common equivalent shares outstanding: Basic 47,077 48,695 47,251 47,908 Diluted 47,574 48,907 47,708 48,130 Earnings per share: Basic: Earnings before accounting change $ 2.68 $ 2.54 $ 0.81 $ 0.94 Accounting change 0.04 -- -- -- Basic net earnings $ 2.72 $ 2.54 $ 0.81 $ 0.94 Diluted: Earnings before accounting change $ 2.65 $ 2.53 $ 0.80 $ 0.94 Accounting change 0.04 -- -- -- Diluted net earnings $ 2.69 $ 2.53 $ 0.80 $ 0.94
|CONTACT:||The Neiman Marcus Group, Inc.|
|Jonna Manes, Director|