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Neiman Marcus Profits Soar

Helped by a big gain in same-store sales, stronger margins and lower costs, fourth quarter profits at upscale retailer The Neiman-Marcus Group climbed 19.3 percent, to $70.6 million from $59.2 million last year.

Sales in the Christmas quarter climbed 7.7 percent, to $1.1 billion from $1 billion. Same-store sales in the core specialty group business, including Neiman-Marcus and Bergdorf-Goodman Stores, advanced 9.6 percent.

In a strong lift to earnings, in addition to the stronger comps, average gross margin widened substantially, by 110 basis points, or 1.1 percentage points, to 32.5 percent from 31.4 percent the preceding year. At the same time, operating costs were whittled 90 basis points, or nine-tenths of a percentage point, to 21.9 percent of sales from 22.8 percent a year ago.

The one soft spot was the retailer's direct marketing operation, where sales dipped by 1.6 percent, to $188 million from $191 million, following the sale of the Chef's catalog. Excluding the Chef's business, however, same-store sales in the business actually climbed by 15.8 percent.

The Neiman-Marcus Group Inc.

Qtr. 1/29 (x000) 2005 2004 % change
a. Fourth quarter results include a $769,000 loss from the retailer's minority interest in a subsidiary, compared with a $934,000 year-before loss.
b. 12-month results include a $1.6 million loss from a minority interest in a subsidiary, compared with $1.9 million last year.
Sales $1,129,225 $1,048,367 7.7
Oper. Income (EBIT) 119,660 90,001 33.0
Net income 70,587a 59,171a 19.3
Per share (diluted) 1.43 1.21 18.2
Average gross margin 32.5% 31.4%
SG&A expenses 21.9% 22.8%
12 months
Sales 2,037,161 1,867,136 9.1
Oper. Income (EBIT) 244,923 187,289 30.8
Net income 134,703b 115,396b 16.7
Per share (diluted) 2.73 2.37 15.2
Average gross margin 35.4% 34.2%
SG&A expenses 23.3% 24.1%


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