Neiman Marcus Q4 Sales Rise, But Loss Widens

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Drew Barrymore appears in Neiman Marcus stores' fall catalogue spreads

Dallas—Despite a double-digit sales increase, Neiman Marcus Inc. reported today that its fourth quarter loss widened due to costs related to lowering its debt load.

For the quarter ended July 30, Neiman Marcus said its net loss rose to $61.4 million, up from a loss of $32.8 million a year earlier. Much of the loss increase came after an after-tax loss of $42.7 million on debt extinguishment that was part of the company’s efforts to lower its long-term debt.

Neiman Marcus, which operates its namesake stores and Bergdorf Goodman, also reported revenue climbed 11% to $919.7 million from $826.3 million.

Comparable store sales increased 11% compared with the prior year period. Sales also rose 11% at both Neiman’s specialty retail segment and the direct-marketing business, which includes online and catalog sales.

Gross margin narrowed to 30.5% from 30.9%.

On the Road to Recovery–and an IPO?

For its full fiscal year, revenue increased 8% to $4 billion from $3.69 billion, but still is below the $4.6 billion posted in 2008 before the Great Recession hit. Comparable store revenue for the year increased 8.1%.

The company ended the quarter Neiman Marcus with long-term debt of $3.71 billion, down 6% from a year earlier. The debut is a result of the $5.1 billion purchase in 2005 by an investor group led by private equity firms TPG Capital and Warburg Pincus LLC.

After Neiman Marcus refinanced some of its debt earlier this year and redeemed some senior notes, which could signal a plan to float an IPO or sales in the future, the company was upgraded by rating agencies Moody’s and Standard & Poor’s.

For its full year, EBITDA, which measures earnings before interest, tax, depreciation and amortization, was $524.7 million, up 17% from the previous year. According to Reuters, using calculations typically used by banks, that would value Neiman Marcus at $5.4 billion.

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