NEW YORK (Reuters) – Neiman Marcus Inc. reported a quarterly profit on Tuesday as shoppers returned to its upscale department stores over the holidays and the retailer avoided profit-eating discounts by keeping inventories low.
The privately held chain, which reported losses a year earlier, also received a lift from its online and catalog Neiman Marcus Direct unit, whose profits more than doubled.
Comparable sales at its Neiman Marcus and Bergdorf Goodman stores open for at least a year, and at its online and catalog unit, rose 0.6 percent in its fiscal second quarter, which ended on Jan. 30.
The two department store chains make up about 80 percent of the company’s revenue.
As affluent shoppers began returning over the course of the quarter and the pressure to offer discounts eased, company-wide comparable sales improved.
In November, they fell 7.5 percent, but turned positive in December and January, and appeared to be poised for further improvement: last month, they rose 6.2 percent.
Neiman’s rivals have also benefited from improving luxury spending as rising stock markets and Wall Street bonuses have begun to restore wealthier households’ net worth.
Last week, Saks Inc (SKS.N) reported that comparable sales rose 3.1 percent in February, while Nordstrom Inc (JWN.N) , which has won market share from its competitors, said its same store sales were up 10.3 percent.
Dallas-based Neiman Marcus operates 41 Neiman Marcus Stores across the United States as well as two Bergdorf Goodman stores in Manhattan. It also runs 28 clearance centers.
Overall revenue in the quarter rose 2.1 percent to $1.1 billion. The company reported a net profit of $4 million, compared with a loss of $509.3 million a year earlier.
Neiman Marcus earned $67.1 million on an adjusted operating basis, compared with a loss of $32.6 million a year ago, excluding an impairment charge in the year-ago quarter.
Neiman Marcus reported merchandise inventories were 12.9 percent lower in the quarter compared with a year earlier.
The retailer was acquired by an investor group led by Texas Pacific Group and Warburg Pincus LLC in October 2005. (Reporting by Phil Wahba; Editing by Maureen Bavdek and Steve Orlofsky)